Get through college with a prepaid cell phone

Some of us aren’t so lucky to be on our family’s cell phone plan. Yeah, we all have friends that are able to take the easy road: their parents have a large plan and pay for their monthly cell phone bill. We weren’t all born rich, though, and some of us have to fend for ourselves. And one of the biggest pains in the ass is the monthly cell phone bill. Who knew talking could be so expensive? This problem looms larger in college. You need a cell phone — beyond the social aspect, it’s a necessity in case of emergency. However, a rate plan may not be the best route. There are plenty of restrictions that can be too much for a college student. So what can you do? Prepaid. We’ll show you the advantages that prepaid has for college students.

1. In the end, it saves you money

Sure, rate plans are advertised as being cheaper — but go over your plan’s minutes and it’ll cost you plenty. With a pay-as-you-go plan, you’re locked into the number of minutes you purchase, so going over is not an option. Instead of paying double your plan’s rate, you just have to purchase more airtime at the standard rate for your provider. And unless you’re buying the airtime with a credit card (please don’t), you’re not spending money you don’t have. For those who talk less, it saves you money in that you’re not paying for minutes you don’t use. You know how much you talk, so it’s easy to figure out how many minutes you need to purchase at a time. So while you’re paying $25 a month for airtime and using every available minute, your sucker of a best friend is paying $50 and not using his allotted minutes — or worse, exceeding his plan and paying $100 per month when the same number of minutes would be available to you much cheaper. Hint: Find a prepaid provider that makes it easy for you to keep track of your available airtime. There are also a few prepaids that offer either free nights and weekends, or offer a ton of minutes for those calling periods.

2. No one will check your credit

Another problem with rate plans is that you need a qualifying credit score to obtain one. Too bad most college students don’t have an acceptable line of credit. So what can you do if you’re in that situation? Well, you could put down a deposit for a rate plan, but that can get costly. Most major providers require a deposit between $100 and $400, depending on credit score. You can expect that to be the maximum for a college student with a limited or no credit history. College students are infamous for scraping by on ramen noodles and dining hall food, so it’s not like many of them have $400 laying around. Plus, that deposit sits with the service provider for a long time. Even if you have the $400, you’re better off tossing it into a high-yield savings account like ING or Emigrant (so you can, as we mentioned, save money). If it’s acting as a deposit, its value is essentially deflating; when you get that $400 back, it won’t be worth as much as when you put down the deposit. With prepaid, no one checks your credit, and you’ll never have to put down a deposit (and if a service provider asks you to put one down, walk away, because the vast majority don’t require a deposit).

3. An easy excuse to say “no” to friends

It’s always tough to turn down a request from a friend. They’re (supposedly) always there for you, so you don’t want to do anything to make you seem self-centered or non-reciprocating (because, you know, you’ll probably need a favor from them in the future). Having a prepaid phone gives you a built-in excuse to say no. “Sorry, man, but I’m almost out of minutes. I gotta get to the store to buy more.” Of course, a second excuse will be necessary if she offers to drive you to the store to buy more. In any case, you’ll be more apt to say no to friends asking to use your phone, because you’re paying for each and every minute you use. WIth a rate plan, you might be more willing to let a friend use your phone — since you have minutes built into your plan — which can cause enormous overages that you won’t see until the end of the month.

4. The freedom to switch

Since one of your objectives is to save money, you’re probably looking for every chance to do so. A huge advantage of prepaid is that you’re not locked into a contract, so you can walk away from your service provider at any time. If a better deal comes along from another provider, you can jump on it — and get out easily if it turns out too good to be true. If you’re getting poor customer service, you can just walk away. Not only does that give you more freedom, it also gives you more leverage the provider (MVNOs need your business; they usually won’t let you just walk away without offering you an incentive to stay). Plus, with most major providers, you can keep your number when you switch, so it becomes even less of a hassle. Yeah, you’ll need a new phone, but many prepaid companies — especially the prepaid divisions of major service providers — offer older phones for free to new prepaid subscribers. Just hold onto your phone of you switch; you never know if you’ll need to switch back.

5. Get cheaper service

One of the common misconceptions of prepaid is that it costs more than a rate plan because there is no contract. While this can be true — especially with the prepaid divisions of major service providers (Verizon, T-Mobile, Sprint) — many MVNOs offer excellent deals on prepaid minutes and plans. How are they able to do this? They don’t normally subsidize phones for new subscribers. This allows them to save on their customer acquisitions cost. Smart companies will pass these savings onto their customers (companies like MetroPCS do this). While the big guns like Verizon and AT&T pay upwards of $300 for each new customer acquisition, companies like Metro can pay half that. When smart companies save, you save, too.

6. Find your niche

That’s the overall theme of the first year or two of college: find your group of friends, find what interests you, find what classes you will help you the most. Now, finding your niche can expand to your cell phone service. A major selling point of MVNOs is that they cater to niche audiences. This allows them to work under the umbrella of major networks without necessarily competing with them. So you can get a general service with a major provider, or you can look to an MVNO to provide little things that will help you save money. Some providers offer free nights and weekends (or an abundance of night and weekend minutes) for subscribing to a higher end plan. Some allow free mobile to mobile calls. There are even some that have free text messaging plans. Really, these features run the gamut. And they’re not offered with the major providers.

7. All the features of a rate plan

Not all prepaid service providers are created equal. Some are very basic — calling and texting plans only. And sometimes you can find a really good deal with one of them and save a ton of money. However, the features of many prepaid services are on the rise. Some, like Virgin Mobile are offering prepaid data plans (though the overage rates are still ridiculous, but they’ll surely come down). Ringtones, games, wallpapers…they’re all becoming more readily available with prepaid plans. So let your buddy brag about his streaming mobile TV. You’ll get it eventually…probably cheaper, too.

8. It’s there in case of emergency

Let’s face it: even with prepaid, some students still simply can’t afford a cell phone. Even $30 a month is a lot for someone whose sole job (student) is an unpaid one. That doesn’t mean you have to be stuck, though. Most prepaid services allow periods of inactivity. What this means for the subscriber is that he or he can have the phone in case of emergency as long as they make a call every 30 or so days. As long as you keep purchasing the lowest denomination of minutes (because if you don’t use them, they will expire), you can have a trusty cell by your side in case you get a flat on the side of the road (and we can surely think of a few other scenarios where it’s more than practical to have a cell).]]>