Prepaid calling on cellphones used to be expensive and even a bit embarrassing, because pay-as-you-go service was often aimed at deadbeats and those with little credit.
Now, thanks to companies such as Virgin Mobile and Boost Mobile, prepaid plans have been growing in popularity. Those who can easily afford the conventional monthly contracts are increasingly attracted to the simplicity of paying in advance -- and using all the minutes they paid for.
Prepaid plans can save you money, especially if you don't use a cellphone much or, if you do, you use it mostly to talk and send text messages.
Your calling habits will determine whether it's a good buy for you.
"Now, it's a lifestyle choice," said Don Girskis, general manager of Boost Mobile, a prepaid Sprint Nextel Corp. subsidiary catering to 4.3 million teens and young adults.
Prepaid calling has caught on among older customers as well. Virgin Mobile, which started out eight years ago targeting the youth market, now finds itself with more than half its 4.6 million customers over the age of 35, said Howard Handler, its chief marketing officer.
What's the attraction?
Right call? Prepaid plans can save cash
They may fit customers of traditional cell services who don't use all their minutes and who don't mind a few drawbacks.
YOUR MONEY
To start with, there are no contracts, termination fees, credit checks, bills, age minimums and usually no added taxes or hidden fees -- those costs typically are included in the flat pricing.
And there's no need to micromanage your minutes because, for most plans, you can't go over your allotted time. When your prepaid minutes are up, you can't make any more calls -- except for 911 -- until you buy more minutes. Carriers give you plenty of advance warning so you can enjoy uninterrupted service.
For Bruce Johnson of Dana Point, who had two cellphones from AT&T Inc.'s mobile unit, switching to a prepaid plan was a simple matter of economics.
"It wasn't the idea that I couldn't afford it," said the lawyer, who has turned in his shingle for stock market trading from his home. "It was the idea that when I sat down at the end of the month, I found I hardly used it."
The concept of using all the minutes you pay for is a compelling one.
"With postpaid plans, the average customer uses only 60% to 75% of their monthly minutes, and the rest is gone," said Kirk Parsons, wireless analyst at J.D. Power & Associates, a consumer research firm in Westlake Village.
For a common plan -- say, $40 for 450 minutes -- that means the average customer is paying 12 to 15 cents a minute, compared with the 8.9 cents a minute he would pay if he used all his allotted calling time.
