Prepaid plunge: Part II

As of today, the two wireless phones in our family are now prepaid. No contract, no additional monthly taxes and fees, no more unused minutes every month. Anticipated savings of about $565 the first year; $820 the second year.

I previously said I would name names for my cell-phone transition. It helps describe the process.

I had Verizon Wireless. I was happy with the service, but not the pricing. We had a family-share plan of 700 minutes, the fewest minutes for any *advertised* family-share plan. It was costing about $85 per month, including all the junk taxes and fees. Problem was, we only used about 150 minutes per month, which means our per-minute rate was through the roof.

I separately ordered two phones from Tracfone.com, the largest provider of prepaid phone service. I ordered mine first, a nice Motorola W370. It arrived a few days later. One inconvenience for some people is you have to be home to sign for the FedEx package, or, I assume, you can pick it up or make other arrangements.

I went on the Tracfone Web site and activated the phone with no problem. I now have a new phone number. Activating online gives you 20 free minutes. (If you call to activate, you only get 10 free minutes.) The special deal with the Motorola W370 is free double minutes for the life of the phone. So, I bought 400 minutes that last for one year. It was automatically doubled to 800, for a grand total of 820 minutes. That should last me most of a year.


Phone cost: $50
400 minute/1year: $99 ($105.99 with tax)

So that’s $150ish for a year.

My wife wanted to use the same phone number as her Verizon cell phone. I ordered the same Motorola phone. It, too, arrived a few days later. I then followed directions on the Web site for porting the phone number from her Verizon phone to Tracfone. I check back today, two days later, and the Web site said the port-in was complete.

That’s where I was confused. I couldn’t figure out on the Web site how to activate the phone. The site kept directing me back to the procedure for porting the number, which I already did. So, I called and got it activated. In hindsight, it seemed all I had to do was turn off the phone and turn it back on again.

Then I added minutes to her phone and got a pleasant surprise. There was a special offer for an additional 200 minutes for buying the 400 minutes/1-year deal, plus 100 free minutes for porting a phone number.

So, she ended up getting 1,110 minutes.

400 minutes for $99
400 minutes because of free doubling for life
200 minutes in a special deal
100 minutes for porting
10 free starter minutes
———————-
1,110 minutes

I called Verizon Wireless and canceled my account. I had to pay an early-termination fee of $155. So, that diminishes our first-year savings. Assuming, the minutes we bought will last us a year, the accounting would go like this:

Verizon Family Share: $1,020
2 Tracfones and minutes: -$300
Early termination: -$155
——————————-
First-year savings: $565
Second-year savings (assuming same minutes cost): $820

What I learned:

  • Prepaid phones aren’t quite as full-featured as post-paid phones. Mine doesn’t have a camera, Bluetooth wireless capability or music-playing ability. But it does phone calling, texting, even Web browsing.
  • Verizon Wireless has an unadvertised 550-minute family-share plan. A rep offered it to me when I called to cancel my account. That would have been nice to know before.
  • There’s a feeling of freedom when you ditch a monthly obligation and pay as you go. At least, for me.
  • Verizon Wireless is known for great coverage and voice quality, but I get more reception bars in my house with a Tracfone. Go figure.

29 Responses to “Prepaid plunge: Part II”

  1. Hi,

    Thanks for a great post, I am thinking of doing the same. One thing that bothers me is that when I search the web about Tracfone customer service, I only see negative reviews.

    What is your experience with Tracfone customer service and the wireless coverage it provides.

    Thanks.

    tk

  2. tk,

    I saw those negative reviews too, which gave me pause. But I figured the great thing about prepaid is you don’t have a lot of money in the deal and could always switch to a different company. (If you were nervous, you wouldn’t have to add as many minutes as I did. And you could buy the $15 Tracfone as a trial.)

    I have called customer service a couple of times, and the calls were answered quickly, like, within a minute. The answers I got were fine. Once was to activate the second phone, which went smoothly. The other call was because Web browsing wasn’t working on the phone. The rep told me I had to call back on a landline before she could help me. I haven’t done that yet.

    Coverage is great — better than I had before — in my home are of suburban Philadelphia, but I haven’t used it yet in other states.

    Hope that helps,
    Greg

  3. […] inspired by my recent examination of wireless service and subsequent switch to prepaid service, a friend of mine started scrutinizing his own Verizon Wireless Family SharePlan. He too […]

  4. […] from Tracfone (same as Net10) and T-Mobile, as well as the aforementioned Virgin Mobile. (Since I switched to prepaid in March, I’ve cut my wireless expense from about $43/mo to $10/mo., averaging usage of about 85 […]

  5. Here’s a great resource for anyone thinking of getting a prepaid cell phone.

    http://www.cellguru.net/prepaid_compare.htm

    I went with PagePlus and my husband went with T-Mobile and we’ve both been happy with our choices.

  6. Greg Karp takes the Prepaid plunge: Part II:…

    Award-winning finance author takes the prepaid plunge by ordering two Tracfone Motorola W370 1-year phone packages. He gets a few bonus minutes, too. Even including the early-termination fee from Verizon, the family still saves about $560 the first yea…

  7. I think prepaid is a wise option for the financially conscious. Now that Tracfone has their Motorola 376g double minutes for life bundles you can get rates comparable if not cheaper than the national carriers. I think prepaid makes perfect sense in rough economic times..

  8. […] I came across Gregory Karp’s write-up on his switch from Verizon to Tracfone, I seriously thought about doing the same […]

  9. Hi,

    Thanks for the post. I use prepaid connection and in my opinion its the best. No monthly billing , taxes etc

    Sai

  10. I’ve had Tracfone in the past. It IS the cheapest option and I’ve found that I had service everywhere I went. The customer service, however, IS abysmal. It was the horrid customer service that finally drove me to a contract with Sprint.

  11. I have the Net10 prepaid service and that is owned by Tracfone. It works for me because I travel quite a bit and spend most of the year overseas for the sake of my health and finances. I haven’t had to deal with customer service as of yet, but I do recharge using Net10’s website. I had a contract with Verizon and I cancelled during their 30-day test drive, after I learned about the $26.00 in monthly taxes and fees. Of that $26 in taxes and fees each month, the county I lived in got $10 for some sort of miscellaneous communications fees. When Verizon for a “line item” explanation of the bill, no one at the three Verizon corporate stores could explain any of the miscellaneous charges to me in a manner that made any sense to me. So, I cancelled their monthly service and returned everything. Now, I have a Net10 phone and plan and it suits me fine the four to five months I’m in the States.

  12. […] I did for two cell phones in our household earlier this year. Read more about that here and here. The net result is savings of about $800 per year, compared with a family plan through a major […]

  13. I have had my Motorola Tracfone 376g for about a month now. I had to wait for a new SIM card to use my old number and had to spend some time on the phone with customer service when my phone did not dial my Voice mail phone number automatically. Customer service had the answers and was there fairly promptly. Now the savings begin.

    Depending on how you buy minutes and what kind of bonuses you get, minutes cost between 8¢ and 13¢. Keep in mind that if you load your phone with cheap minutes and lose the phone, the minutes are gone so it may be in your interest to keep less minutes on the phone and pay a little more. Even at higher minute rates and figuring that you will replace your fone every year at a cost of about $4 per month, you can use Tracfone service for $17/mo if you use 100 minutes per month; $29\mo if you use 200 minutes. No additional taxes or fees!!

    Since I can now text for practically nothing [.3 minutes per message], I was disappointed to find how expensive texting is at Verizon. My wife remains a Verizon customer and has to pay 20¢ for each text message sent or received compared to less than 4¢ for me.

    Since Tracfone piggy backs on the networks of bloated contract companies to give me reasonably priced service, I urge those of who are supporting those networks by signing up for two year contracts at outrageous prices to continue to do so. As long as Verizon and AT&T are fat, happy, and arrogant they won’t even notice us Tracfone customers using their networks for a whole lot less money.

  14. The biggest con the US cell providers pull is not using SIM cards - with SIM cards you can change providers whenever you like, you just copy your contacts from SIM card to phone, insert new SIM, and switch contacts back to new SIM. Instead you have phones which do not give you that option unless you pay someone to swap the contacts over, which leads to a lot of passive resistance to switching networks.

  15. Thanks for the article. I know that I have avoided cell phones all together because of the high cost of plans that I would never use. So this is something that may open the door to cell phones for me at a level of convenience more reasonable with the price to be paid for it.

    Thanks,

    Chris

  16. I am a happy Tracfone customer, since I changed to Tracfone I discovered that I can make long distance and international calls to about 60 country’s for the same price as a local call. I don’t have to pay for roaming and there are no extra state taxes or daily fees which, altogether, makes Tracfone the cheapest prepaid provider on the market.

  17. I actually bought a Tracfone for my 10 year old nephew as a birthday present. It’s very affordable plus a good way to teach him to keep tracks of his minutes so he doesn’t go over.

  18. All Pre-Paid (GO-Phone) providers, other than ATT, TMobile, Verizon, and Sprint, use these 4 Primary carriers to provide you service. They by cell time in very large blocks from Primary Carriers because they do not have Cell Towers of their own.

    So, the coverage you get will depend on the carrier your Pre-Paid provider is using. Verizon is the best in the North East where it is mountainous requiring many towers, and Verizon has been there the longest. ATT and T-Mobile provides very good service and is closing in the difference in the North East.
    In the West, where it is mostly wide open, ATT and Tmobile are as good if not better.

    If you want to check-out a non-primary carrier; Tracfone, Virgin, NET10, etc, then just google them and you can find whose primary tower they are using. Of course, with GO Phones selling at WalMart etc for $10 to $20, sometimes with enough minutes to pay for the phone, you want lose much by buying and trying.

    The big advantage to an ATT or Tmobile carrier, is they use GSM international type modulation towers, so your phone will be useable in other countries worldwide by just changing a little SIM (Subscriber Information Module) card in your phone. This SIM also allow you to use it in any other GSM phone that is either unlocked or of the same service provider. In other words, you have much more freedom to switch phones keeping your carrier and phone number(your number and carrier is on your SIM card, not your PHONE), for example buying a used phone that is of the same carrier, or that is unlock from the original carrier.

    In addition, a GSM phone(ATT,Tmobile, or a Pre-Paid that uses these carriers towers) is more valuable if sold used, say on ebay, because others can use it by simply plugging their SIM into it. Also, once you are out of your contract, the carrier will usually provide you the unlock code to unlock your phone from their carrier, because you have fully paid for it over the contract period so it is fully YOURS. Once unlock, it can be used on ANY GSM carrier, making your phone even more valuable used.

    This brings up another advantage to GSM, you can keep your SIM card and upgrade to a better phone periodically by buying a someone elses used or new phone, that is unlocked or once sold by your carrier, at very good prices. This solves the problem of staying in contract just to have a more modern phone. Remember, if you are in a 2 year contract and got a very expensive phone free or next to free, 2 years is along time and you will be responsible for the FULL NEW PRICE of this phone if you need to bail out due to unknown circumstances.

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