What is a prepaid phone? The advantages and disadvantages of ‘burners’

Today, most people who use cell phones contract with a wireless company. Prepaid phones offer a different arrangement.

Although they are becoming more and more popular, they are still the minority, which might lead you to wonder: What is a prepaid phone? Here we’ll take a look at these devices and see how they can be a viable option depending on your specific needs.

Prepaid phones: the basics

Prepaid phones can also come in handy if:

• you want a simple phone for occasional use

• your credit record isn’t great

• you want to look before committing to a two-year contract

A prepaid phone plan offers the basic services of regular cell phones. However, there are no long-term contract requirements or additional charges for minutes exceeding the monthly subscription. And signing up is easy.

You can find cheap options at retail, electronics, or discount stores — or even through major carriers like AT&T (formerly Cingular), T-Mobile, and Verizon, which have added prepaid options to their plan mix.

You’ll find that prepaid phones (also called “burner phones”) work just like any other, albeit without a long-term commitment and some of the bells and whistles.

You buy a mobile phone with a fixed service (amount of data usable for a certain number of months). If you exceed your data limit, you can purchase more minutes immediately or within a certain time limit. Or you can simply stop using the phone.

Advantages of prepaid mobile phones

The main advantage of prepaid services is the combination of freedom and control they offer. With a prepaid mobile phone you are not tied to a multi-year subscription with a fixed number of minutes per month during certain calling times, additional costs if you exceed the limit and a high fee if you break the contract.

You can talk whenever you want, for as long as you want, until you run out of minutes or data. And you don’t have to pay a monthly bill.

Talking more one month and less the next makes no difference, and leftover minutes often carry over from one month to the next. And if you want to switch to a different type of subscription, a prepaid phone gives you the freedom to switch whenever you want.

The story continues

Because no contract is required, prepaid phones are quick and easy to purchase. They are also available in many locations, ready to use and even disposable. These benefits make a prepaid phone work particularly well in the following cases.

Parents of teenagers

If you run out of minutes, you won’t be able to call or text. You can still make emergency calls and, on some phones, receive messages that are saved until you have the minutes to view them.

Parents can purchase a cheap cell phone for a teen and a certain number of minutes or amount of data, allowing the teen to budget and pay for additional minutes.

Occasional cell phone users

If you only use your cell phone for emergencies and maybe call a few times a week, you don’t need a fancy phone or a complicated billing plan. A prepaid phone may work well, but make sure you are aware of any time limit on unused minutes.

Short term users

No contract means no credit check or need for an address, making it ideal for calling on the go. If you are abroad, you can get a prepaid telephone number for the duration of your stay.

Trial users

Before signing up for a long-term cell phone contract, use a prepaid phone for a month or two to determine what your (or your teen’s) actual usage will be. Then you can find a subscription with the corresponding minutes and calling times.

Young adults and others with no credit history or credit card debt

Buying prepaid phones doesn’t require a long-term contract and credit check, so students with part-time jobs or older adults with no credit utilization or less-than-perfect credit can easily get a phone.

3 Problems with prepaid cell phones

While prepaid phones offer many benefits, they can also pose problems for their users. Depending on your usage pattern, you may incur higher charges per minute, a serious disadvantage for anyone who makes a lot of phone calls.

Due to the increased interest in the prepaid market, prepaid telephone rates have fallen and subscriptions have improved. For example, prepaid provider Boost Mobile offers a flat monthly unlimited calling plan for $25 in some states.

However, in most cases, per-minute rates are still lower with traditional contract plans [source: TMCNet]. Here are some other disadvantages of prepaid cell phones.

1. Descending minutes and service: The minutes you purchase for your prepaid cell phone may have an expiration date of 30 or 90 days. If so, you will lose them if you don’t use them by then. You may also need to purchase minutes regularly to extend the activation period. For example, if you buy 60 minutes for $20, you can extend your service for another two months [source: Wireless Guide].

2. Unexpected costs: With a prepaid cell phone, you won’t pay monthly taxes or cancellation fees like traditional plans, but you may encounter other unexpected charges, or higher charges than you might expect for additional services. You may be charged a daily access fee of 99 cents to $2 for days you use the service or for each day. You may also be charged for roaming, sending text messages or photos, downloading games, and accessing the Internet [source: CNET].

3. Limited features: You probably won’t find the latest, most advanced features on the average cheap prepaid phones. While older prepaid providers generally had a relatively limited number of devices available, this is starting to change. Many prepaid phones are now just as good as models for subscription users, although there may be fewer options overall.

What is a burner phone?

Prepaid cell phones offer anonymity, which is not something everyone likes, especially in law enforcement agencies. In Texas, a senator once introduced a proposal that targeted gang members, who often use so-called ‘burner phones’.

Prepaid cell phone plans

When you start looking at prepaid cell phone plans, you will come across many variations. For example, you can buy a regular cell phone with basic service and then just add minutes as you need them.

You can select a more advanced phone with additional features and services, and you can buy larger bundles of minutes to get it cheaper. You can also opt for a prepaid phone plan that is almost a hybrid of a prepaid plan and a traditional monthly plan.

Start with the plan, not the phone, experts advise. Next, look at the quality of service you can expect from the plan in your area. Finally, whether you choose a true pay-as-you-go plan or a monthly plan, pay close attention to costs and minute rates. These may include:

• There is a daily fee that is applied every day or every day you use the phone

• Roaming charges outside a certain area

• Use of higher network speeds (such as 5G) may be limited to premium plans and may be subject to a speed downgrade once the user exceeds a certain threshold.

Once you’ve chosen your subscription type, the next decision is which provider to use. Let’s look at that now.

Prepaid cell phone providers

Prepaid cell phone providers can be classified as mobile virtual network operators (MVNOs) or traditional wireless carriers. The MVNOs focus on the prepaid phone sector, renting space on traditional carriers’ networks rather than having their own networks.

Well-known MVNOs include Boost Mobile (a subsidiary of Sprint), TracFone (a subsidiary of American Móvil, a Latin American wireless carrier), and Mint Mobile. Here are some quick overviews of these companies, based on reviews and surveys of prepaid phone users.

• Coin Mobile: One of the more recent additions to the prepaid phone market, Mint Mobile offers flexibility, attractive discounts, and a variety of phones to choose from, including Samsung and Apple devices.

• Boost mobile: Aimed at young users, and one of the simplest, clearest providers, with some of the most competitive prices available. Boost Mobiel offers particularly low rates if you bring your own telephone; simply swap the SIM card and you are good to go.

• TracFone: This provider offers simple prices, cheap phones, transfer minutes and an on-screen display of the number of minutes remaining.

Traditional mobile phone providers have done business primarily through long-term monthly contracts with customers. However, they are also expanding and enriching the prepaid offering to capture a share of this growing market. Traditional providers with prepaid offers include AT&T, T-Mobile and Verizon. Here are some strengths for each, again based on surveys and reviews.

• AT&T Prepaid: This provider has a large national network and the flexibility of two subscription types. They offer smartphones and traditional cell phones and include service in Mexico and Canada.

• T-Mobile Prepaid: They have a wide variety of prepaid phones, as well as the option to keep your current phone.

• Verizon Prepaid: Here you get the same quality and customer service as traditional subscriptions, with a wide choice of phones. With Verizon prepaid, prepaid phone plans are available with unlimited or specific data limits. As with many companies, prepayment for a longer period results in lower prices.

International prepaid mobile phones

International calling from your prepaid cell phone can be easy, if you’re calling from the United States and your prepaid plan offers an international option. However, if you want to call from another country, you’ll probably want to consider other options, such as an international prepaid cell phone.

Suppose you are calling from the United States. All you have to do is call 011 + the country code + the city code + the phone number. For some countries – such as Canada, Puerto Rico or Jamaica – you don’t even have to call 011.

However, if you are calling from another country, you probably have an issue with your phone’s compatibility with local networks.

Cellular telephone networks in the United States use different technologies to transmit information. Only one of these, Time Division Multiple Access (TDMA), supports Global System for Mobile Communications (GSM), the international standard used in Europe, Australia and much of Asia and Africa.

Mobile phone users in those countries can buy one phone and easily switch to another SIM card for phone access in any country.

If you will be staying in a country for an extended period of time, you can also purchase a prepaid cell phone as soon as you arrive. You can make unlimited incoming calls for free in almost every country.

Original article: What is a prepaid phone? The advantages and disadvantages of ‘burners’

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