Prepaid Cell Plans Grow as People Cut Back

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    NEWSLETTERS

    TK
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    As people look for ways to save in a tough economy, more are turning to prepaid wireless plans.

    Elliot Litke, of Dallas, recently bought one because he doesn't want unexpected bills.

    "It won't let me overuse the minutes, so it's not like I'm going to be paying these overcharges," he said.

    Customers with prepaid plans pay for minutes as they go, with no monthly fees and no service contracts.

    "Really, it's for anyone who wants complete control over what they're spending for wireless and when they're spending it," said Sarah Andreani, an AT&T Wireless spokeswoman.

    She said many parents prefer prepaid plans for their teens because, "You don't have any surprises at the end of the month where they go over and kind of get your pocketbook."

    According to CTIA: The Wireless Association, prepaid cell phone plans now account for about 17% of the entire wireless market. In 2001, there were 9.5 million prepaid phone users. Today, that number is more than 44 million.

    Prepaid plans also make most sense for people who use a smaller number of minutes. People who typically use more than several hundred minutes a month may benefit from the lower per-minute charges that come with traditional contract plans.

    But customers such as Litke say one of the keys to prepaid is simply having more control.

    "It's good to have bills that are set and you know what they're going to be," he said.