How Prepaid Phone Cards Work

by Gigi Starr

What is a Prepaid Phone Card?

Prepaid phone cards stock minutes for a set amount of money, usually $5, $10, $15, $25 or $50. The amount of talk time varies depending on the location of the call, fees and duration. These cards are useful for those who don't wish to drive up their phone bills with international calls, people without long distance phone service, or customers who don't want their calls recorded on a bill. However, prepaid phone cards are also a potentially bad deal. Many include lots of fine print that hides superfluous fees, dormancy charges and extra costs that eat up the card's total value. There are also problems with fly-by-night operations that close shop, taking callers' money and unpaid minutes in the process. Because of these dangers, most reputable review sites such as CNET only recommend cards backed by major carriers.

The Possible Pitfalls of Prepaid Phone Cards

According to CNET writer Brian Livingston, prepaid cards are such a risky prospect that "the cards might actually be considered a form of gambling." Citing the differences between the billable (phone charge account) cards and prepaid versions, Livingston points out that the majority of prepaid deals are shaky, opaque and a poor bargain. One case in New York City heralds a crackdown on service vendors' unscrupulous practices. The Televend Company advertised rates as low as 3.9 cents a minute, yet never delivered on those promises. In 2000, New York State Attorney General Elliot Spitzer fined the company $4000, saying in a statement that "it was not disclosed, or it was disclosed in extremely fine print or on hard-to-read signs, that there were other fees and connection charges that greatly increased the price of a call." Whether it's a $5 card or a more expensive one, these cards may be more hassle than help.

Are Any Prepaid Calling Cards Safe to Use?

The only calling cards that are safe are ones sold by major phone companies. AT&T sells a dependable card through stores and the company website. There are even "instant" cards for purchase on the site that are ready for use immediately. No physical card is needed. These cards offer ten minutes of talk time for $7 and up to a maximum of 750 minutes for $37.50. International calls cost more. However, these cards work, and AT&T isn't going anywhere soon, minimizing the possibility of fraud.

About the Author

Gigi Starr is a freelance fashion writer. She previously served as the blog editor for a major online fashion blog and has more than a decade of backstage experience in the beauty and high fashion industries. She has worked for businesses like an internationally renowned theatrical touring company and events such as the Mercedes-Benz N.Y.C. Fashion Week.

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Photo Credits

  • photo_camera 2008 SeRVe61 / Creative Commons