Prepaid Cell Phone Plan Buying Guide: Virgin Mobile Vs. T-Mobile

Why Choose a Prepaid Cell Phone Plan?
With prepaid cell phone plans, you only pay for the airtime minutes you actually use when making wireless calls. This kind of pay-as-you-go, prepaid cell phone plan, is ideal for consumers who don’t use their cell phone’s often, or who want to put themselves or their teenagers on a cell-phone budget. This is especially true for those who can’t figure out how much the taxes and surcharges are going to be on a monthly bill – and that’s just about everybody.

If you use your cell phone daily, or frequently, a prepaid cell phone plan is not the choice for you – you’d be better off choosing a monthly plan with unlimited air time. But if you mostly use your phone for emergencies and travel, you can save big money by switching to a prepaid phone.

Don’t believe me? During a recent scan of my finances, I discovered that my cell phone and its two year plan were costing me nearly $500 a year to just sit in my car, virtually unused. By switching to a prepaid cell phone plan, I was able to save nearly $300 a year, and I now enjoy one of the newest phones on the market. For the casual cell phone user, switching to a prepaid cell phone plan can fatten your wallet.

How Does A Prepaid Cell Phone Plan Work?
You purchase airtime minutes for your phone in advance, or on a “Pay As You Go” basis. This can usually be done conveniently either by buying a phone card from a local retail store or directly on a website, using a credit card. Some prepaid cell phone plans even allow you to purchase minutes from your phone. Then you start talking. When you run out of minutes, you just add more.

Ah, but you knew there was a catch. And there is. Some prepaid cell phone plans put a time limit on your minutes – that is to say, they expire if you don’t use them. This kind of bait-and-switch can and should be avoided with careful planning, and it’s one of the reasons that Virgin Mobile (whose minutes never expire if the phone remains active) and T-Mobile (whose minutes don’t expire for a year with the purchase of $100) are among the more popular providers.

What About the Prepaid Cell Phones Themselves?
If you truly use your phone only for emergencies on the road, and you don’t care about any feature other than being able to dial your friends, family, insurance company, or the police – you might want to go with TracFone, since they’ll throw in the phone for free. (Virgin Mobile also offers a free phone when purchased with bundled minutes.) You might also consider buying a bare-bones phone from Net-10, where every airtime minute costs a flat rate of 10 cents.

But most consumers have a combination of needs when it comes to using their wireless phones. They may not need to use their prepaid cell phone frequently, but when they do use it, they want to make sure it’s stocked with features. For kids, ring tones, instant messaging and games may be the most important features for a new phone to have. For adults, the following affordable features may be handy, if not essential:

• A Built In Camera. (Hey honey, look at this house that’s for sale on Elm Street!)
• A Speaker phone. (Look Ma, I can talk and drive. No hands!)
• Text Messaging. (I’m in a meeting right now. I’ll call you later.)
• Web Browsing. (What’s the latest news? Is there going to be a traffic jam?)

If you’ve shopped around for the best full-featured phones, you know that T-Mobile and Virgin Mobile offer the best options in the prepaid cell phone market. (Cingular offers feature-rich prepaid phones as well with some flexible “Pay As You Go” plans, but by adding a $1 daily access charge for days you do use the phone, they’ve priced themselves out of the prepaid cell phone market for consumers who don’t expect to use their phones frequently. And don’t bother shopping Verizon Wireless. Their outrageously priced prepaid cell phone plans make it seem as if they aren’t even trying to compete.)

Prepaid cell phones can be purchased new from the service providers themselves, or you can find some excellent bargains on Ebay.

What are the Advantages of T-Mobile’s Prepaid Cell Phone Plan?
Once you’ve purchased your prepaid cell phone, if you add $100 of airtime, T-Mobile won’t expire your minutes for 365 days. The 1,000 minutes it’ll buy you should be more than enough for the casual user, and can be rolled over into the next year by another purchase. T-Mobile does not charge a daily access fee for use of its prepaid cell phones. Text messages are 10 cents to send, and soon to be 5 cents to receive. Picture messages are soon to be 25 cents to send or receive. Plus, T-Mobile’s coverage area is nationwide and extensive.

The downside of T-Mobile’s prepaid cell phone plan? International rates on T-Mobile are prohibitive. It’ll cost you 40 cents a minute plus airtime just to call Canada on your prepaid cell phone – double the going rate of any other plan. Moreover, T-Mobile is extremely deceptive about the web browsing capabilities of their prepaid cell phones. Sure, the phones they’re selling you are capable of web browsing, and T-Mobile will charge you just $1 to access the wireless internet. But what they don’t tell you is that their prepaid cell phone plans limit you to “surfing” what they call T-Zones. That is, your prepaid cell phone can only access sites that T-Mobile has chosen for you, such as CNN. If you wanted to use the phone to connect to MapQuest, you’re out of luck. And if you complain, T-Mobile will try to sell you an additional monthly plan for almost $30 a month just for access. Unfortunately, T-Mobile’s business strategy seems to involve enticing consumers to purchase a seamless, simple prepaid plan based on promises they don’t intend to keep.

What about Virgin Mobile’s Prepaid Cell Phone Plan?
Virgin Mobile is a youth oriented company that offers feature-packed prepaid cell phones at reasonable prices, and cut-rate airtime. They also have excellent customer service, the most flexible plans of any provider in the industry, offering the ability to switch plans at your convenience depending on your personal situation. Going to have a month where you use your prepaid cell phone all the time? Switch to a month-by-month plan. Find that you use your prepaid cell phone during the summer, only when on the road? Switch to a Minute-by-Minute plan, or even Day-by-Day. Moreover, Virgin’s prices on the small stuff are very competitive. Text messages are 5 cents to send and receive. A call to Canada is 20 cents a minute plus airtime. Using the Internet is $1 for 24 hours, and when Virgin Mobile says prepaid cell phone web browsing, they mean that you can enter any URL you like – not just the ones they’ve pre-approved. However, Virgin Mobile’s prepaid web browsing suffers the debilitating limitation of being unable to access sites like MapQuest, or other travel and direction resources.

Virgin Mobile’s prepaid cell phone minutes never expire, but to keep the phone active, you have to “Top Up” by purchasing $20 in minutes every 90 days. (Veteran Virgin Mobile Users will point out that you can actually choose a special option that will drop that number to $15 every 90 days, and have it updated automatically so that you don’t have to think about it.) For those of you who don’t want to do the math, that means keeping your prepaid cell phone active for a year will cost you $60 worth of minutes, as opposed to the $100 over at T-Mobile.

The catch? Virgin Mobile’s coverage is not as extensive as T-Mobile’s but they’re swiftly improving and probably cover your area. Also, Virgin Mobile’s airtime minutes will cost you more. And Virgin Mobile sometimes seem to operate on a business model of nickel-and-diming the customer to death. Their “Pay As You Go” standard at the time of this writing is 18 cents a minute, but there is a Minute2Minute plan for 25 cents a minute for the first ten minutes, and then 10 cents thereafter – which means every ten minute call on your prepaid cell phone is going to cost you between $1.80 and $2.50, but if you only make short “Honey, what brand of milk did you want?” phone calls, you could still save money overall.

Virgin Mobile vs. T-Mobile Prepaid Cell Phone Plans Overall
In the end, it’s going to come down to how much you think you’ll actually use your prepaid cell phone. If you use your phone infrequently, but regularly, say, once a week every time you run errands, or every weekend when you have that long drive back from Mom’s house, T-Mobile’s prepaid cell phone plan is the way to go. If you buy $100 of airtime minutes in advance, they’ll give you more minutes than you’ll ever need, at a reasonable price, and you won’t have to worry about it again for 365 days. Most likely, you’ll still have airtime left over at the end of the year, and you’ll have the convenience of a feature-rich, top of the line phone to boot.

However, if you have an unpredictable schedule, Virgin Mobile’s prepaid cell phone plan is for you. If your wireless phone usage varies greatly from month to month, or even week to week, Virgin Mobile’s inherent flexibility will save you money – perhaps lots of money. As an infrequent user, Virgin Mobile can cost you as little as $7 a month when everything is added up. You may not like seeing the price-tag for each call, but knowing you can optimize your prepaid cell phone savings is comforting. It might more comforting than seeing $50 bucks worth of T-Mobile minutes still unused on your prepaid cell phone at the end of the year, and knowing that was $50 bucks you could have used. In that case, Virgin Mobile’s the clear winner.