I have been using prepaid cellphones for about 4 years. For my family and I this has worked out extremely well. But we are different than many others who use their cellphones as their primary phone and who also need to text 24 x 7. I have been seeing the ads from Verizon on TV and also just read an article over at the New York Times, which covers the question. Is a prepaid cellphone right for you?

The NY Times article states:

But now these pay-as-you-go phones are winning over fans for different reasons — recession-battered consumers are buying them as a way to cut costs and avoid the lengthy contracts and occasional billing surprises that come with traditional cellphone plans.

“Frugal is the new chic,” said Joy Miller, 33, a piano teacher in Aubrey, Tex. After almost a decade on contract plans with Verizon Wireless, Mrs. Miller and her husband decided this month to test-drive a few prepaid plans, including MetroPCS. “In today’s economy, it’s not cool to pay $120 a month for a phone. It’s a waste of money.”

Although prepaid phones remain a fraction of the overall mobile phone market, sales of the category grew 13 percent in North America last year, nearly three times faster than traditional cellphone plans, according to Pali Research, an investment advisory firm. For the first time in its history, T-Mobile has been signing up more new prepaid customers than traditional ones. And Sprint Nextel is betting that a new flat-rate prepaid plan will help it wring more value from its struggling Nextel unit.

Both my wife and I have our own prepaid cellphones but we each have our own separate plans. We are with AT&T which offers two different plans. My wife uses the flat rate which is .25cents a minute. I user a $1 access only when I use the phone and .10 cents a minute. We have a broadband connection through Vonage and opted for the $14.99 plan which provides 500 anytime minutes per month. With tax and fee we pay about $18 a month for Vonage.

So how much are we paying for two cell phones and Vonage per month? Under $40 total. Again, we are not big telephone users nor do we text at all.

So what about you? Would a prepaid cell phone work for you? Or do you need the convenience of a full plan and contract?

Comments welcome.

Source.