How Does a Pay-as-You-Go Cell Phone Work?

By Denise Sullivan

Pay-as-you-go phones are a convenient way to obtain a cell phone without a credit check or long-term commitment. You can purchase minutes and data as needed instead of committing to a contract. These phones work well for people who would like to try out a new service provider on a short-term basis, don't have a high enough credit scores to be attractive customers for extended cell phone contracts, only use a cell phone for emergencies or are traveling and need a temporary local number.

Purchasing Phones and Airtime

You can buy phones and airtime cards for a specified number of minutes at retail outlets such as Target, Walmart and Walgreens. You also may be able to use an old phone by switching out its SIM card with one from your new pay-as-you-go provider. The airtime card must be activated at the cash register before you can use it to reload your account. Once the card is activated, enter the code listed on the card into your phone or on your service provider's website. The appropriate number of minutes will be added to your current balance.

Monthly Plans

Some providers offer monthly airtime and data plans with no credit check or long-term contract. This allows you to keep the flexibility of having a pay as you go phone without the hassle of having to constantly stop and add more minutes. As long as you continue to pay the monthly fee, your phone will receive an automatic reload of the specified number of minutes each month. You can buy more airtime if you run out of minutes before your next monthly reload. If you do not use all of your minutes in a month, your unused minutes may carry over to the next month, depending on your service provider.

Service Time

In addition to buying airtime, you may also need to continue extending the expiration date on your account. Most airtime purchases include an extension until a specific date. Cards with higher numbers of minutes typically extend the account for a longer period of time. For example, one card may give you 30 minutes of airtime and another 30 days of service, while another gives you 90 minutes and 90 days of service.

Add-Ons

Data plans and international long distance may not be included with your basic airtime purchases. Depending on your service provider, data plans may be sold by the megabyte or charged based on the number of minutes you use your phone to connect to the Internet. Text messages and emails may also be treated as a phone call with a duration of at least one full minute.