Pre-Paid Phone Cards

 

In just the past decade, the 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.

Questions or complaints about pre-paid phone cards or its posters or advertisements should be directed to the Attorney General’s consumer help line at (800) 771-7755.

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