Ask Andy: Pay-as-you-go cell phones - Action News 5 - Memphis, Tennessee

Ask Andy: Pay-as-you-go cell phones

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Andy explains what's good and what's bad about pay-as-you-go cell phones. Andy explains what's good and what's bad about pay-as-you-go cell phones.
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MEMPHIS, TN -

(WMC TV) - As long as you use the minutes you've purchased, a prepaid cell phone -- or "pay-as-you-go" phone -- is a legitimate, money-saving option.

A pay-as-you-go cell phone is particularly nice if you only want a cell phone for emergencies or if you're not really sure if you'll use a cell phone enough to warrant a data plan.

I use one for investigative purposes. I can change the number monthly -- and the numbers can't be traced back to me or to Action News 5. 

Each month, I pay up front for the amount of minutes I intend to use. Once they're used, it locks up.

If I want to unlock it, I load it with more minutes. If not, I just hold on to it until I'm ready.

No extra fees. No hassle.

The GSA Federal Citizen Information Center (www.consumeraction.gov), in its Consumer Action Handbook, outlined the pros and cons of pay-as-you-go (prepaid) cell phones:

PROS:

* NO CONTRACT

* NO MONTHLY BILL

* YOU DETERMINE HOW MANY MINUTES, SO YOU KNOW EXACTLY HOW MUCH YOU WILL SPEND

CONS:

* IF YOU DON'T USE THE PHONE FOR AN EXTENDED PERIOD, YOU MAY LOSE WHATEVER BALANCE YOU HAVE IN YOUR ACCOUNT

* YOU PAY MORE PER MINUTE THAN MOST STANDARD CELL PLANS

Remember, you have control over the amount of minutes, so the higher rate per minute really doesn't matter.

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