In just the past decade, the prepaid
phone card industry has mushroomed to a $4 billion
industry with an estimated 500 million cards sold last year alone
Pre-paid phone
cards offer convenience for travelers and access to generally economical
telecommunications prices for those consumers without telephone
service in their homes. However, there are things to consider when
purchasing a pre-paid phone card.
Beware of Extremely
Low Rate Cards: If you are buying a prepaid calling card
from an unfamiliar company, buy the minimum denomination and try
it. Because some companies advertise rates as low as 1¢ per
minute, this way you should be able to spot surcharges and hidden
costs before you spend a lot of money.
Before you purchase a
prepaid telephone card, carefully read the card and its package
very closely for the following fees and surcharges:
Connection Fee: Many cards charge at least 50¢ for connection
and in some cases even more each time you make a call. Pay Phone Surcharge: Many cards charge an additional fee
of at least 50¢ per call for each call made from a pay phone.
International Surcharge: Many cards charge an additional
fee of up to $3.00 for each international call. Taxes: Many cards levy an additional surcharge of up to 25%
per call for "taxes."
"Maintenance Fees": Some cards charge a weekly
"maintenance fee" after the card is first used. If you
use the card only occasionally, this fee can add up. Rounding: Most cards round up a call to the next minute.
Some cards use six minute rounding. This means a one minute call
will be charged as a six minute call.
How to Shop
for a Prepaid Calling Card
Many prepaid phone cards
do not disclose enough information, especially information about
their actual rates which is necessary to enable consumers to make
informed purchasing decisions.
Cards that charge very
low per minute rates (1¢- 4.9¢) but high surcharges may
still be a reasonable value if you make calls of 10-15 minutes each.
If you anticipate using
the card to make calls under 10 minutes, cards that charge a higher
per minute rate (9.9¢ and up) but do not have surcharges are
probably the better deal.
Those who expect to use
pay phones should be careful to look for cards that don’t
surcharge for this service.
Although many prepaid
phone cards make express promises of substantial savings, many fail
to disclose the basis of the claimed savings.
The quality of the service
provided can vary dramatically among prepaid phone cards. Some cards
provide excellent service. With others, consumers may encounter
trouble connecting to calls or with the quality of the call. Still
others charge for uncompleted calls or turn out not to work at all.
There are also significant
differences in the features provided by prepaid phone cards. Before
buying a prepaid calling card, consider how you will use the card.
Some cards provide no extra features, while others provide consumers
with such benefits as the ability to proceed in different languages,
speed dialing, the ability to be recharged to add additional value
and protection against loss.
Additional benefits often
come at a price. The more features a prepaid phone card has and
the more information it provides its users, the more expensive it
tends to be.
