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Defining Pay As You Go Phones
Consumers have flocked to mobile phone contracts in recent years for a variety of reasons. These contracts typically feature lower barriers to entry because of subsidies for phones. Telecommunications companies offer a wider range of phones with one-year and two-year contracts, attracting consumers interested in the latest gadgets. The major issue with these upfront incentives comes after the phone is activated. As the months move along, contract holders may be crammed with additional fees, stuck with excess minutes, and left unsatisfied with their phone service. Pay as you go phones have emerged in recent years to answer these concerns for consumers.
Prepaid or pay as you go phones require consumers to purchase phones and phone cards before activation. After purchasing a phone and phone cards, a phone owner activates the phone with an 800 number and adds an initial chunk of minutes. These minutes are debited from the total amount of the first phone card until a new phone card is required. Pay as you go phones eliminate the need for long-term contracts and other onerous elements included in mobile phone contracts.
Advantages Of Pay As You Go Phones
The overriding advantage of a pay as you go phone is the simplicity of the exchange between consumer and phone provider. Consumers choose from basic phones rather than a seemingly endless roster of gadgets and PDAs when opting for prepaid service. Prepaid phone providers do not require credit cards or credit checks to operate their products. These phones have become available not just at mobile phone stores, but groceries and convenience stores around the world. As soon as minutes elapse on a phone card, an owner need only head to a convenience store or kiosk to buy more minutes. Prepaid providers have recently allowed their customers to add minutes through online accounts. This a la carte approach to phone service is convenient enough for users who do not spend thousands of minutes on their phones.
Disadvantages Of Pay As You Go Phones
Pay as you go phones have a number of disadvantages that drive away some consumers. The per-minute and per-text costs for a prepaid phone are higher than a contract phone. Phone contracts lock consumers into a year or two years of service, which means there is a volume discount applied to minutes and texts. Another issue with phone minutes comes when a prepaid phone reaches the expiration date of a phone card. If minutes are not used by this expiration date, which is typically 90 days after activation, the phone card becomes null and void. Inactive prepaid phones need to be reactivated regularly, creating an inconvenience for some consumers.
Another disadvantage of prepaid phones is the limitation of technology available to prepaid consumers. The stereotypical prepaid phone is a basic rectangular phone with a simple screen and a handful of features designed to meet the minimum needs of users. By contrast, phone providers offer PDAs, touch screen phones, and more advanced mobile phones to contract holders. These consumers are paying monthly regardless of how many minutes they use, which means that initial subsidies are recouped easily by phone providers. As well, phone providers offer better warranties and protections to contract phones compared to prepaid phones. While a pay as you go phone may seem inexpensive in the long run, the questionable durability of these phones may lead to multiple phone purchases by consumers.
Target Markets For Prepaid Phones
The most prominent markets for prepaid phone providers are high school and college students. These young consumers lack the credit histories and cash to commit to long-term phone contracts. Pay as you go phones limit high school and college students to strict minute limits while providing a good alternative to long-distance calling. As prepaid phones become more sophisticated in the next decade, these markets will continue to grow as young consumers leave behind strict phone contracts.
Prepaid phone providers attract adults who use their mobile phones too scarcely to warrant long-term contracts. These buyers look to pay as you go phones for occasional phone calls to friends, family, and colleagues in faraway places. Prepaid phones are also bought frequently for emergency communications in case of car accidents and household injuries. These phones are also popular among business travelers and jet setters who want more flexible communications options while hopping from city to city.
Pay As You Go Phone Carriers
The prepaid phone trend has not occurred entirely outside the realm of traditional phone providers. Major telecommunications companies like AT&T© and Verizon Wireless© offer pay as you go phones as entry points to their contract phones. Consumers can find prepaid phones and phone cards at major retail outlets like Wal-Mart©, Target©, and Walgreen’s©. To find the best prepaid phone deals, however, consumers need to look to newer companies like TracFone© (http://www.tracfone.com/), Cricket Wireless© (http://www.mycricket.com/), and Virgin Mobile© (http://www.virginmobileusa.com/).
TracFone© offers pay as you go phones with a minimum startup cost of $10. This prepaid phone provider is known for its Unlimited Carryover Benefit, which allows users to save minutes from phone card to phone card. Cricket Wireless© offers month-to-month phone plans starting from $30 with affordable plans for families and businesses. This phone company has upped the ante on prepaid phone quality by carrying products with MP3 players, cameras, and other features. Virgin Mobile© is perhaps the most prominent provider of prepaid phones with products at Best Buy©, Target©, and other retailers. Customers at Virgin Mobile© enjoy easy access to minutes along with the convenience of month-to-month agreements.
Resources For Pay As You Go Phones
Your first step toward owning a pay as you go phone is to find independent sources of information about these products. Prepaid Reviews© (http://www.prepaidreviews.com/) is a clearinghouse of information covering dozens of prepaid phones. This website offers information on prepaid brands ranging from Alltel© to Xtreme Mobile©. You can also review the pages of Wirefly© (http://www.wirefly.com/) as you consider buying a prepaid phone. Visitors to Wirefly© can compare prepaid, unlocked, and contract phones from all major carriers.
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