Marty Focazio knew his cell phone calls were costing him a lot, but it was still a bit of a shock when he did the math and learned just how much it was per minute.
Using a spreadsheet to tally up the total monthly charges including taxes for all his voice minutes and text messages, he discovered he was paying as much as 42 cents each for his 400 to 500 minutes a month. Not exactly what the provider had touted.
“You see the ad that says $59 a month, but then you add it up and you realize, ‘Holy crap, my phone bill is $120 a month!'” and sometimes much higher, said Focazio, of Upper Black Eddy, Pa.
So he did the budgeting equivalent of dialing 911: He turned in his smartphone and got a prepaid model from TracFone without all the bells and whistles. Now he has spent $160 total on it in the five months since.
“It’s nice to just have an extra 50 or 100 bucks a month,” said Focazio, 44, a strategist at a digital media agency in New York.
Prepaid phones, which provide a set number of minutes, are becoming a more appealing financial option as careful household budgeting becomes paramount in a tight economy.
Cell phone users who switch to them can cut their monthly spending significantly — particularly those who talk 300 minutes or less a month, says the Telecommunications Research and Action Center, a Washington, D.C.-based nonprofit.
That, of course, is precisely why service providers prefer long-term contracts instead. Most don’t advertise prepaid plans widely, instead targeting them largely at low-income users. But all major carriers offer prepaid phone plans, and consumers are increasingly signing up.
The number of U.S. prepaid wireless subscribers is estimated to have grown by some 19 percent as the economy slowed last year, a…