Less expensive than calling collect and often cheaper than using a calling card, prepaid phone cards are catching on with travelers, college students and others who spend time on the phone away from home.
The prepaid-phone-card industry, in its infancy just a few years ago, expects to sell $1 billion in cards in the United States this year.A prepaid card looks like a phone-company calling card. But instead of getting a bill for your calls, you buy $5 or more of phone time in advance.
To use the card, you dial a toll-free number, enter your personal identification number, make your call and talk as long as you have time left in your account. The price per minute for domestic calls ranges from 20 cents to about 60 cents. You'll be charged a flat, per-minute rate no matter where and when you call in most of the United States, although international calls cost more and some companies charge double for calls to Alaska or Hawaii.
Most systems will let you know when you're running low on minutes, and sometimes you can recharge the card over the phone with a credit card.
In a special offer available only through Sam's Club stores, MCI sells one of the lowest-rate prepaid cards, at 20 cents a minute. But you have to buy your calling time in bulk; the card is available only in a $100 denomination.
You'll also get competitive rates from ACMI (800-860-8641), LDDS WorldCom (sold at Target stores) and TransNational Communications (800-653-2669), which charge 25 cents a minute and let you buy a card for as little as $7.
The per-minute rates on the least-expensive cards are about the same as daytime rates for collect and calling-card calls, but you avoid the surcharges. You also avoid paying through the nose to use your calling card at a pay phone serviced by an unfamiliar company.
But using a prepaid card isn't always the best option. For local calls, using coins is much cheaper. If you can take advantage of lower nighttime rates and tend to make long calls, a calling card can be cheaper.
You should also know that some prepaid cards, such as those marketed by AmeriVox and LCI, charge an activation fee or levy per-minute charges from the time you punch in your PIN rather than from the time your call connects, according to Consumer Action, an advocacy group based in California.