Cell Phones


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Posts: 4
Registered: ‎11-03-2007

what does prepaid mean when your talking about cellphones

what does prepaid mean when your talking about cellphones
Exalted Expert
Posts: 5,743
Registered: ‎06-14-2007

Pre-paid is a term generally applied to a method of payme...

Pre-paid is a term generally applied to a method of payment wherein you either select a plan and pay for the upcoming month, or purchase minutes prior to using them. In this manner, companies don't have to worry about collecting overdue bills, since you pay up front.
Posts: 8
Registered: ‎08-05-2007

Typically, cellphone companies use the term "prepaid...

Typically, cellphone companies use the term "prepaid" to mean you purchase cards with a given dollar amount on them ($10, $25, $50, etc.) and you put that dollar amount into your account for use.  With a prepaid account, you don't enter into a contract... that means it's not necessary to run your credit.
Hope this helps :smileyhappy:
~ Xannie
"I reject your reality and substitute my own."
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Retired Moderator
Retired Moderator
Posts: 393
Registered: ‎08-05-2007

Just to clarify on the above posts (which have pretty muc...

Just to clarify on the above posts (which have pretty much summed it up to 99%).

Cell phone company clients fall under two categories. Pre-paid and Post-paid.


These clients choose a rate plan/price plan, example 20$/200 minutes/month. They are billed 20$ monthly plus the usual fees and taxes, and charged any overage that they may incur, and they will receive an invoice via mail, etc. They can then chose to pay it at their bank, ATM, or set up a Direct Deposit or Credit Card payment option that gets done automatically every billing date. Now, the way post-paid works, is that you are paying for the next 30 days usage, which is a static number (20$ plan, 6.95 network fee, .50$ 911 service, and any add-ons you have, like caller ID etc), PLUS any dynamic charges from the past 30 days, like non-included LD minutes, going over your local minutes, etc. This is why many people get confused with their invoices when they receive them. Also, since your paying for what you used AFTER you used it, the company is putting their faith in you that you will pay for what you've used, hence the "post" in Post-paid. This is why they will run credit checks on clients, and depending on the result, will request a deposit that is returned to the client eventually depending on the provider.


For clients that find the above too annoying or confusing, or for clients that don't wish to have a credit check, or for clients that don't have the IDs required for credit checks, or for clients that the deposit requirement is too high (I've seen some cases where a provider requested a deposit of 1000$, which is rare), or simply for people that legally can't sign a contract, like minors for example. In the case of Pre-Paid, as was described in an above post, the client buys a "pre-paid card", which has an exact value to it, be it 10-20-25-30-50$ etc, and 'deposits' that card amount in their account. They can then go ahead and use their cell as they wish with a pre-determined plan according to the provider's options, and the time used will be deducted from the total. So once you reach zero, or close to it, well, you simply can't use your cell until you refill. This way, the provider is protected from anyone using the service and then not paying it, for example, get a phone, call Cuba for 5 hours a day every day for a month the disappearing.

So, in conclusion, it all depends on how you want to go about it.
Kevin B.G.
Montreal, Quebec
"Ready, Steady, Go!"
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