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Our family hasn’t had a ‘normal’ cell phone from one of the big carriers for about a year now. Instead, we use a prepaid cell phone from TracFone because it is far less expensive for our situation. Instead of paying around $30/month plus taxes, our cell phone bill is only about $6.36 per month - probably less than the taxes alone on most cell phone plans.

In quickly looking at plans from Nextel, Verizon, and Qwest, it looks like their cheapest plans are $30/month and have about 200 minutes. Anybody who has the one of these plans should consider a prepaid phone instead. As you can see in the chart below, you can save over $130/year even if you use 180 minutes per month. A prepaid phone plan may not be for you if you are on your phone a lot, if you use free minutes a lot (ie: nights and weekends, or family members), or if you have to have the latest and greatest phones (I’m pretty sure you can’t get an iPhone with a prepaid plan)

Pricing for prepaid phones is a little different than how most of us have been ‘trained’ to think about wireless phone plans. One good thing about prepaid phones is that there are no contracts or commitments required. With TracFone, you purchase a phone for anwhere from $15 - $139. Then you purchase airtime plus 3 months of service together. Depending on your usage, you might purchase a 60 minute card and 3 months of service for $19.99 or a 200 minute card with 3 months of service for $39.99. If you use up your minutes before your three months is up, then you would need to buy a card for additional airtime to continue using it. If you don’t use your minutes before the three months is up, then you need to buy another card to extend the time on it (but you get to keep your minutes).

The key to getting a good deal in finding some good bonus offers that are available. One good deal is to pay $50 up front for a ‘Double Minutes For Life’ card. Once you buy this card, you will get double minutes for any new ones you purchase. If you use 60 minutes or more a month, it makes sense to buy this. You pay for 60 minutes, but actually get credited with 120 minutes. If you are the type of person who uses 30 minutes or less a month, they have an additional option when checking out to add 2 months of service (no additional minutes) for $10.

Before I purchase any new airtime, I have been checking this coupon site for any bonus offers that are currently available. Also, I occasionally get promotional offers in the mail or via email that contain some good deals. So far, I have been able to more than double my minutes each time. There are coupons for a free 60 minutes when you buy 60 minutes, etc.

Also, their seems to be some quirkiness on TracFone’s site on how the bonus minutes get added. Their site doesn’t show you the bonus minutes until after you complete your purchase. The first time I added minutes, I had a coupon code for 20 extra minutes when I bought 60. I didn’t realize that their site didn’t display the bonus minutes, and ended up applying the coupon several times and ended up with 80 bonus minutes. When I added airtime to my phone last night, I found coupon #58287 for 60 bonus minutes. After checking out, I ended up with 120 bonus minutes. I can’t remember for sure, but I may have applied that coupon twice. I suspect that the bonus minutes are getting added up when you apply them multiple times, but I’m not certain.

Here is a breakdown of what a Tracfone plan would cost based on your number of minutes used per month. I calculated a ‘regular’ cell phone plan at $30/month plus $6 in taxes ($432/year). For most of these, it makes sense to buy the ‘Double Minutes For Life’ deal for $50.00. The monthly and annual prices have the $50 included, so next year, you would save an additional $50/year since you don’t need to purchase that card again. I’m also assuming that you can always get 60 bonus minutes for free.

There might also be ways to get a better deal by purchasing more minutes and getting the 2 extra months for $10. The best deal for you depends on your own usage. I’d recommend starting out with more minutes than you think you might use and adding the two months for $10. Then if you find you have plenty of minutes left over, you can just buy fewer minutes when you need to renew.

Why Prepaid is better:

With regular cell phone plans,  you almost always buy more minutes than you use.    200 minutes per month for $30 sounds like a decent deal at $0.15 per minute until you consider that the minutes vanish unless you use them.    If you only use 60 minutes per month, then you are actually paying $0.50 per minute.  If you only use 30 minutes per month, then you are paying a whole $1.00 per minute!   With a prepaid plan, you only pay for minutes you use.   If you use the bonuses offers right, you can keep your prepaid phone service under $0.15/minute pretty easily.