If you have family or friends abroad, or if your kids are going somewhere for spring break, using a prepaid phone card to make calls may look like a good option. You see the cards sold everywhere. But Consumer Reports says buyer beware. Despite millions of dollars in government fines, deceptive practices are still prevalent.
Consumer Reports' investigation of prepaid phone cards finds that there are a lot of fees that eat away at a card's value. There are call-connection and call-completion fees. There can even be fees that are charged daily, monthly, or weekly whether you use your card or not. And all the cards Consumer Reports looked at charge a per-call fee if you use a pay phone, some as high as a dollar.
There are also huge differences when it comes to rates. For calls to Mexico, you can pay as little as 1 cent a minute or as much as 32 cents. Rates for calls to Guatemala range from 6 cents to 54 cents a minute!
Consumer Reports says that the best way to protect yourself is to look at the terms and conditions very carefully. But that can be difficult in a store, where cards are often behind the counter.
Consumer Reports says it's far better to shop online, where it's easier to get information and you'll find a greater selection. Try independent sites, such as ZapTel, and the major phone companies.
And look for a card that's rechargeable. But watch out because some of the rechargeable cards charge a fee as well.
Consumer Reports says Pingo is a good choice for prepaid calling. It offers good rates and a low pay-phone fee and doesn't charge an extra fee for recharging.
Before buying a prepaid card, Consumer Reports says, check with your landline or cell-phone company to see whether it offers an affordable international plan. Also consider Skype, an Internet-based phone service. The caller needs a computer, but the person you're calling does not, and the international rates can be very inexpensive.