Saving with 6abc: Prepaid cell phones

December 24, 2012 (WPVI) -- The average American household spent more than $1,500 this year on cell phones and services. If you're looking to save money on your bill, Consumer reporter Nydia Han has the 411 on how to do it.

Verizon rates better than any other cell phone carrier in our area for voice, text and data services. That's according to Consumer Reports' latest survey of its subscribers in the Philadelphia area. But if you want to save money, Consumer Reports says a prepaid plan may be your best option.

"Two-thirds of our subscribers who switched to prepaid service knocked 20 dollars or more off their monthly costs," according to Rosalind Tordesillas of Consumer Reports.

Prepaid services are offered from companies like TracFone, Straight Talk, and MetroPCS. Big cell-phone providers - 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," Tordesillas told Action News. "Some even have unlimited plans. You may pay more upfront for the phones. 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 smart phones. The Galaxy S III is available from Metro PCS and the iPhone 5 is available from Cricket Wireless - another prepaid company. But if you don't need the absolutely latest smart phone, 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," Tordesillas said.

Straight Talk has several plans, including 45-dollars a 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 a new carrier. You can often get the same service for a lot less.

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