Phone Card Charges - What you need to know!

Here they are, all the charges you need to know before buying a prepaid phone card.

Prepaid phone cards all have different fees built into the cards - look out!

Ever heard any of the following: calling rate, billing increment, connection fee, maintenance fee? All prepaid phone cards have different fee structures. They are designed for different calling purposes. With all the different charges that each card can have, you need to know which billing structure is right for you. You may think that a 1¢ a minute card is the cheapest out there. Think again, it may not be. Only until you uncover all of the charges will you find out which one is the best for you.

Here are all of the different ways phone cards can cost you money:

Per Minute Rate

This is the rate that is charged for calling a specific destination. Usuallythis rate is charged on a per-minute basis (i.e. 5¢ per minute). The calling rate will vary depending on where you call and the time of day you call for some cards. Most cards advertise their rates but you can always check to see what rate you are being charged. To check the rate you are being charged, take the dollar value remaining on the card and divide it by the remaining minutes. You can usually obtain these numbers when placing a call. Before you connect, you should be told how much money is remaining on you card and how many minutes you have for the current call. For example, if you have $5.00 remaining on your card and you have 100 minutes for the call then $5.00 / 75 = .025. The rate you are being charged for the call would be 2.5¢ per minute

Billing Increment

This is the incremental charge for each minute you use. Some cards will charge you for each minute you use and round up no mater if you used a full or past of a minute. For example if you call a friend, get their answering machine and only use 20 seconds, some cards will charge you for an entire minute.

There are a couple of different ways time increments can be billed. Some cards will charge a set amount for the first 30 seconds or 1 minute of the call and then reduce the incremental charge after the initial period. These smaller increments can be either by the second or every 5 seconds or 30 seconds.

For example, a card that charges 5¢ per minute and has 1-minute minimum with 5-second increments, if you talk for 1.5 minutes you would be charged 7.5¢. In comparison, a card that charges 5¢ per minute with a 1-minute minimum and 1-minute increments, you would be charged 10¢ for exactly the same call. 2.5¢ does not seem like that much but if after you make a bunch of calls it does add up.

Connection Fee

This is a one-time fee that is charged each time you place a call. Not all phone cards have this charge. This fee is usually for cards with extremely low per-minute rates. Companies need to charge this fee to offset the low rates they offer. Be warned however, buying a prepaid phone card that charges a connection fee is only worth it if you talk for along time on each call you make. For example, if you buy a $10 card that charges $1 to connect you may be down to $9 on the first call if the answering machine picks up. Connection fees can also vary if you are making domestic or international calls.

Maintenance Fee

This is an administrative fee that is charged and varies widely for different prepaid phone cards. This fee is usually charged weekly or monthly depending on the card. Maintenance fees are only charged after a card has been activated. But look out, some fees can drain cards very rapidly. If you don’t plan on using a card very often, make sure you buy one without a maintenance fee.

Validity Period

This is the lenght of time a phone card is good for. After the validity period is over the card has reached its expiry dates it is no longer active. When cards expire you loose any remaining balance on the card and are unable to use it again. Typical lengths for expiry dates are 3 to 6 months after the card has been activated. Expiry dates are different for each card so be sure to use it before it expires. If you don’t know how much you will use a card, start off with a $5 or $10 phone card and you can always buy another one later.