Prepaid Phones: 5 Fast Facts

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Fact #1. Prior to the early 1990s, contract-based mobile phones were your only option. Several companies providing prepaid phone services emerged during this time. Other American companies joined the fray later in the decade. A Portuguese company was the first European operator to offer a prepaid service in 1995.
Fact #2. The primary benefit of a prepaid phone is freedom. It all boils down to the plan. While these phones provide the basic services of regular cell phones, they do not come with long-term contract requirements. They also don't have overage charges you incur for exceeding the monthly minutes in your plan.
Fact #3. Unlike contract phones, you won't have to go through a credit check to purchase one of these. There's also no age limit. This makes them an attractive option for parents who want to buy their child a phone. They can maintain control over their minutes, texts, and data usage.
Fact #4. While the overall price you pay for a prepaid phone will likely be less than that of a new smartphone, the per-minute rate is probably higher. The variety of models available to you is also significantly limited in comparison to contract phones. Because of this, these phones are most suitable for occasional users, those who don't require constant connectivity, and emergency situations.
Fact #5. Today, most major phone carriers offer prepaid plans. However, not all phone models are compatible with all plans. This means you may have to do some mixing and matching before settling on an arrangement that works for you. Some are true pay-as-you-go plans. Others allow you to sign up for monthly payments. Ask yourself what you need. Do you need to be able to play music, stream media, and use apps? Do you require a camera? Or will a simple phone that allows you to call and text suffice?