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Prepaid phone cards: Check for hidden fees, high calling rates

March 25, 2011 12:00:00 AM PDT
If you have family or friends abroad, using a prepaid phone card to makes calls may look like a good option. You see the cards sold everywhere, but buyers should beware. Despite millions of dollars in government fines, deceptive practices are still prevalent.

Consumer Reports' investigation of prepaid phone cards found some calling rates can be very high and there are a lot of fees that eat away at a card's value.

"There are call-connection fees, call-completion fees, and there are even fees that can be charged daily, monthly, or weekly whether you use your card or not," said Consumer Reports' Tony Giorgianni.

All the cards Consumer Reports looked at charge a per-call fee if you use a pay phone, some as high as $1. 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 high as 32 cents. Rates for calls to Guatemala range from 6 cents to 54 cents a minute.

"The best way to protect yourself is to look at the terms and conditions very carefully," said Giorgianni.

But that can be difficult in a store where cards are often behind the counter. Consumer Reports said it's far better to shop online, where it's easier to get information and you'll find a greater selection. Try independent sites like ZapTel.com or the major phone companies.

"Look for one that's rechargeable. But watch out, some of the rechargeable cards charge a fee to recharge them," said Giorgianni.

Consumer Reports said Pingo.com is a good choice for prepaid calling. It offers good rates, a low-pay phone fee, and doesn't charge for recharging.

Before buying a prepaid card, Consumer Reports says check with your landline or cell phone company to see if they offer an affordable international plan.

You should consider Skype, an Internet-based phone service. While the caller needs a computer, the person on the other end does not, and the international rates can be very inexpensive.