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Consumer Reports rates best prepaid phone plans

January 1, 2013 12:00:00 AM PST
Verizon rates are better than any other cellphone carrier in the Los Angeles area for voice, text and data services. That's according to a just-released Consumer Reports survey of its subscribers in and around L.A. But if you want to save money, a prepaid plan may be your best option.

It seems like just about everyone is on a smartphone these days. And we're paying big bucks for all that connectivity.

"The average American household spent more than $1,500 this year on phones and services, and the biggest spenders easily spent twice that much," said Rosalind Tordesillas with Consumer Reports.

Consumer Reports says a prepaid phone plan can be a smart way to save.

"Two-thirds of our subscribers who switched to prepaid service knocked $20 or more off their monthly cell-service costs," said Tordesillas.

Prepaid services are offered from companies like TracFone, Straight Talk and MetroPCS. Big cellphone providers like Verizon, T-Mobile and AT&T also offer prepaid plans.

"Prepaid plans are either pay-as-you-go or have a monthly allocation of minutes," said Tordesillas. "Some even have unlimited plans. You may pay more up front for the phone, but you can save in the long run."

The phones offered with prepaid plans used to be just the basics. But some prepaid carriers now offer smartphones. The Galaxy S III is even available from Metro PCS and Cricket Wireless offers the iPhone 5, another prepaid company.

But if you don't need the absolutely latest smartphone, Consumer Reports recommends Straight Talk's prepaid plans, available through Walmart.

"It's interesting that people in our survey were actually happier with Straight Talk than with contract service from any of the major carriers," said Tordesillas.

Straight Talk has several plans, including $45 per month for unlimited talk, text and data. That's half the price of Verizon's cheapest unlimited plan.

Consumer Reports has another money-saving tip: When you're coming off a contract, if you have a phone you like, ask if you can transfer the phone to a prepaid plan with your current carrier, or even a new carrier. You often can get the same service you've been getting but pay a lot less.