Before you choose a prepaid cell phone, you need to understand why they came about in the mobile phone industry and how cellular service providers treat the branding and service of the prepaid market. This service is different from the contract market in a few different ways, so it is important to make sure you’re okay with these differences before you drop a contract.

What Is A Prepaid Cell Phone?

Simply put, prepaid cell phones are mobile phones where you buy the service for them before you use them. Essentially, you buy credit to use a provider’s network so you can avoid charges and recurring bills. These cheap cell phone plans are often defined as a “pay-as-you-go” service or no contract cell phone plans. When it comes to finding the most affordable wireless phone service the cheapest prepaid cell phone plans are often a great option to consider. You can find a variety of cheap prepaid phone plans that fit a variety of needs from very basic and cheap prepaid phone plans to unlimited prepaid cell phone plans.

With most cellular service providers, you can add credit, or minutes, to your prepaid cellular phone account any time to continue service. This can often be done through your prepaid cell phone account online, by purchasing a prepaid card in a retail store or using your credit card to buy the additional credit directly through your cell phone or by calling your cellular provider.

These minutes generally have an expiration date of 30, 60 or 90 days. With some prepaid cell phone providers you can find minutes that last up to a year. The unused minutes generally rollover if you keep your account active by buying new minutes before the expiration date of your previous minutes, but check with the carrier to be sure; don’t assume anything unless you see it in writing.

Note that most prepaid cell phone solutions utilize SS7 (signaling system seven) out-of-band signaling.

Origins of the Prepaid Mobile Plan

In examining cell phone history, one might trace the origin of this business approach to telephone billing to the decision to splinter AT&T’s monopoly in the early eighties. This opened up the primary telecommunications network to outside providers, which freed a number of smaller companies to initialize different payment systems.

The first large scale solution for prepaid mobile phone service occurred in the early nineties when the Houston Cellular Telephone Company devised a way to offer service to customers who were otherwise denied cellular service because of a lack of credit history or a poor credit history.

Since then the concept has been adopted by almost every major cellular carrier in the world. While it is often considered the “cheap” approach to cell phone service, in some areas — such as Ireland — prepaid plans have become the standard.

Disadvantages of Cheap Prepaid Cell Phones

Because managing high priced phoned calls can be difficult for carriers, more costly services are often limited in a prepaid mobile plan. For example, customers in this pay-as-you-go type of system will often have more of their credit used up for SMS messages and international calls then the equivalent standard billing plan from the same provider. This is why it is important to consider your planned use of a cell phone before committing to cell phones without plans.

Advantages of Prepaid Cell Phones

In many cases, however, a pay-as-you-go cell phone plan will provide you less expensive service with fewer contractual limitations. It helps to keep spending down as you can only use what credit you have available, and you often can avoid common cellular service fees such as provider transfer fees and termination fees. It is also often the only service available to individuals without a phone number, address and credit card. But if you are looking for cell phone family plans this probably isn’t the best way to go, unless you need to limit the kids’ use of their cell phone to avoid overage charges.

Security Concerns

Because such pay-as-you-go services are often available to people without addresses or credit cards, they’ve become a point of alarm for security agencies around the world. Without an address or phone number associated with customers, these cell phone users could remain anonymous in a way that could be appealing to those involved in criminal behavior.

Thus in recent years discussion has developed about developing a registration system for prepaid mobile phone users. Of course, then you open the problem of privacy, so this matter is still hotly contested.

I hope this provides you with a more grounded understanding of the prepaid phone phenomenon. Don’t just opt for prepaid cell phones just because the upfront price looks the best; be sure to examine the plan, its restrictions and its services as a whole before committing your money to what you think is the cheapest cell phone plan.