Pre-paid phone cards represent telephone calling time you buy in advance. You pay from $2 to $20 or so to buy local or long-distance calling time; the amount of time you buy depends on the rate-per-minute charged. For many people, pre-paid phone cards are very convenient. You’ve paid for the phone time and you can use the card from any phone to make your calls.

But the Federal Trade Commission (FTC), the nation’s consumer protection agency, says that some pre-paid phone cards can have hidden costs. As a result, they don’t deliver the number of calling minutes they advertise. Because you pay in advance, you may be out of pocket — and out of luck — if you discover a problem trying to use the card. That’s a big difference between pre-paid phone cards and traditional long distance calling cards, where charges don’t appear on your bill until after you’ve made the call.

You can buy pre-paid phone cards at newsstands, grocery and convenience stores, travel agencies, retail stores, and on the Internet. People who regularly call overseas use them, as do travelers, students, and those who may not have long-distance telephone service. You can add minutes to many pre-paid phone cards, usually by charging the additional cost to your credit card.

How Pre-Paid Phone Cards Work

Most pre-paid phone cards display a local or toll-free access telephone number and a personal identification number (PIN). The companies that issue the cards have computers that use your PIN to keep track of your card usage — how much time you have on your card in minutes or units. To make a phone call, you dial the access number, enter your PIN, and at the voice prompt, enter the phone number you want to reach. A computer tells you how much time — or how many units — you have left on your card, and how to use other features your card may offer. If your pre-paid phone card can’t be recharged — that is, if you can’t use the telephone to buy additional minutes for the card — you’ll need to buy another card once you’ve used up the time or units on your card.

When you buy a pre-paid phone card from a store, it’s important to remember that the store doesn’t control the quality of the service. To make sure you’re getting what you pay for, try buying a card for a small denomination first to test out the service.

Consumer Concerns

There’s no question that prepaid phone cards offer convenience. But sometimes, the cards don’t work as promised. Some people who have bought and used these cards have registered complaints about:

• cards that don’t deliver the number of calling minutes they advertise
• cards that debit minutes or units even when you don’t connect with the number you’re calling
  hidden connection charges, taxes, and surcharges that increase the rate-per-minute
• bad connections
• access numbers or PINs that don’t work
• customer service numbers that are busy or simply don’t work
• toll-free access numbers that are constantly busy, preventing you from using the card
• issuers who go out of business and leave card-holders with a useless card

Buying Time and Value

You can avoid many of these problems — and buy considerable peace of mind — by planning. Although many people buy pre-paid phone cards on-the-spot, you can avoid disappointment by doing some advance work:

• Ask any retailer if they will stand behind the card if it doesn’t deliver the number of minutes advertised.
• Check the card’s package or in-store advertising for domestic and international rates. If you can’t find the rate, consider buying a different card.
• Look for disclosures about surcharges, “maintenance” fees, and fees for making calls from a pay phone, to a cell phone, or using a toll-free access number.
• Compare rates. Very low rates, particularly for international calls, may be a warning sign that the card won’t deliver the number of advertised minutes.
• Look for expiration dates.
• Look for a toll-free customer service number. If the customer service number isn’t toll-free or displayed, it may be difficult to contact the company if you have a problem with the card.
• Make sure you can understand the instructions on the card.
• Make sure the card comes in a sealed envelope or that the PIN is not visible. Otherwise, anyone can copy the PIN and use the phone time you’re paying for.

Via: The Facts About Pre-Paid Phone Cards

In the mid 70s, a European vending machine company introduced phone cards as a means for individuals to easily make toll calls from any phone via a pre-selected long distance carrier. The popularity of phone cards, or prepaid calling cards,
spread throughout Europe, and eventually to the United States in thelate 80s. Prepaid calling cards were initially intended as a cost efficient way to place toll calls from pay phones or hotel rooms. However, in recent years their popularity has extended to residential use as well, as the long distance rates offered by many cards are preferable to the cost of monthly long distance phone service.

Defining Prepaid Cards

Prepaid calling cards are generally defined as telecommunications credit cards enabled to access a predetermined amount of service from a specific long distance provider . A unique PIN (personal identification number) imprinted on each card acts as an identification code, and monitors the time available to the account. This allows you to pick up virtually any phone, such as a payphone, hotel phone, or residential phone without long distance services, and place a prepaid call. You can do this by simply dialing a toll free access number and providing the card’s identification code. Prepaid calling cards can usually be purchased in increments ranging from $5 to $100. The cards are then divided into units, which can either apply the value directly to the long distance service, or function as a flat number of minutes. In addition to long distance minutes, many cards also apply these units to other charges as well. A lot of prepaid calling cards carry an additional connection charge, which can vary in size depending on the type of phone the call is being placed from. This
connection charge is usually largest with payphones, and can amount to several units. For example, a $5 phone card might be good for 60 minutes/units, but the card might entail a four unit payphone connection fee, so a six-minute call from a payphone would deduct ten minutes from the card. The value of prepaid calling card units might also vary according to when the call is placed. Many card providers double the value of units at night and on weekends. Using a prepaid calling card during peak hours or from specific locations may also diminish the amount of available units. Before placing too many
calls with your prepaid card, it is a good idea to familiarize yourself with the provider’s terms and rates so you will be able to maximize the prepaid minutes available to you.

Why Use Prepaid Calling Cards?

Prepaid calling cards have also become a popular alternative for people who don’t have a traditional residential long distance provider. They can be purchased by anyone, and don’t require a credit check, authorization, complicated registration, or even a permanent address. A person whose profession demands a lot of travel may find it preferable
to use a prepaid card from their hotel room, rather than use their cell phone minutes. College students are another prime market for prepaid phone cards. Dorms and off-campus housing are often not equipped with
long distance service. College students also often lack the financial security to consistently cover a monthly long distance bill. Prepaid calling cards provide a good alternative by allowing students to purchase their long distance time beforehand, and place calls from anywhere they choose. Prepaid calling cards are also invaluable to travelers. The cards provide an automated and standardized means for making international calls from various countries. What used to be a
complicated process involving the international operator, and an assortment of confusing, ever changing rates and hidden fees has become somewhat regulated thanks to prepaid calling cards.

An easy quick guide to choosing the right prepaid calling card.

Figuring out how to select the right calling card in an over
saturated market can be daunting task. It seems like there are so many
options. Googleing the keywords “prepaid calling cards” will bring more
then 12,000,000 different responses. Many people simply search for the
card that will provide them the lowest rates. However, often don’t
realize that these cards are actually the most expensive.

In three easy steps learn how to pick the right calling card for
your needs. This will save you money and put you on the right track.

1. Identifying your needs.
2. Understanding your options.
3. Making a Selection.

Identifying Your Needs

With so many different cards to choose from its important to
identify exactly what your needs are. This will assist when trying to
decipher between cards.

Important things to consider when identifying your needs:

• Destination – Where are you calling?
  
• Duration – How long do you think your calls will be? Under 30 minutes or over an hour?
  
• Frequency – Is it a one time thing where you need to make an international call, or do you frequently make international calls?
  
• Connection Quality – do you need high connection quality, or are you simply looking for the cheapest way to place a call?
  
• Traveling – Do you need a calling card for when you travel, or is it for use in the United States?
  
• Business Use – Do you plan to use the card for business or personal use?
  
• Recharge – Are you looking for a phone card that can be recharged?

Understanding Your Options

It is extremely import to never underestimate how much calling time
a dollar can by you. Call to places like Europe, Parts of Asia, South
America and Australia for 40 minutes on just 1 dollar.

Now that you have identified your needs, it is important to
understand your options. Make sure you read all of the details of the
calling card before you purchase it. Many companies are very sneaky and
add unforeseen fees. Resulting in a one time use from the card,
expiring the minutes.

Fees

Many prepaid phone cards have hidden fees. Companies have designed
all sorts of creative fees. Such as connection fees, maintenance fees,
termination fees, disconnection fees, etc. Almost all wholesale rates
to major destinations are the same universally. Calling cards
displaying low rates tend to have that have fees associated with them
as way to make up for the low rates.

Depending on your needs, fees might not necessarily be bad. If you
have identified yourself, as someone who infrequently uses a calling
card, however have purchased one to make an international call, you
should be solely motivated by rates. This is true especially for people
who only plan to use the calling card once or twice then, no longer
need it. Purchasing a card with biweekly maintenance fee is beneficial
because in two weeks, the user will no longer need the card. However,
if you are someone who frequently makes international calls and
regularly uses a card, then selecting a card with no fees would provide
great benefit. While the rates may be higher, you won’t have to pay a
connection fee or almost a dollar in maintenance fees.

Minute rounding is another tactic calling card companies have
designed to seek the most amount of money from their customers. Most
calling card use 1 minute rounding. However, there is a large selection
of cards that use 2, 3 and 4-minute rounding. Minute rounding is how
your calls are charged.

For example a call lasting 33 seconds will charge minutes like this:

Obviously 1-minute rounding will save you most amount of money,
however, cards with higher minute rounding will provide low rates per
minute.

Almost all calling cards intended for use from the United States
provide toll free access numbers. Many calling cards also provide local
access numbers that will supple lower rates per minute. Generally, if
there is a local access number it will behoove you to use it. Even if
the number is not local to you many people have nationwide calling
plans on their cell phone. Meaning it won’t cost anything extra to call
a local access number in a different area code.

If you plan to purchase a prepaid calling card to make calls while
traveling, then you must make sure that the calling card you have
selected has access numbers in the country your are traveling to. In
addition you should check to see if it is a toll free or local access
number in that country. Like in the United States, a local access
number in a country will provide lower rates then the toll free number.

Calling cards are a great way for small business and home business
to reduce their international long distance spending. Many calling
cards on the market today also offer advanced features. Often these
types of calling cards are referred to as dial around long distance
services.

Common advanced dial around features include:

• PIN-less dialing
• Speed Dial
• Call Back
• International Access numbers
• Detailed calling records
• Automatic account recharge
• No fees associated
• Rechargeable

Generally, dial around long distance calling cards can be recharged,
however most traditional calling ards do not offer this option.
Recharges are great for people frequently using their card. It
eliminates the hassle of having purchase a new card. Turn the auto
account recharge feature on for your card, never have to bother with
adding funds to your account. It can be done automatically.

Searching on the Internet or even in stores you will find there is
wide variety of cards to choose from. There are the name brand cards.
These are calling cards released from major carriers such as AT&T,
MCI, IDT, Verizon, etc. Because they are name brand cards does not mean
they the best. Often name brand cards offer more expensive rates per
minute because you are paying a premium for the name. Calling cards
offered from smaller carriers are often better alternatives to name
brand cards. Having a smaller advertising budget allows them lower
their rates. Large companies like AT&T must regain several million
spent in advertising costs over the year and as a result pass expensive
rates to their customers.

Selecting the right calling card for your needs should be a low
involvement decision, however should require some thought to make sure
you are getting an adequate product. The best way to find out about a
good product is from someone that can give a testimony of its service.

Garrett Friedman is a well-known and respected published author of numerous telecom articles. Read about prepaid calling cards, prepaid phone cards, prepaid mobile phones and other telecom products from Long Distance Post, LLC. Your number one telecom provider.