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Don't Dial-Up The Wrong Long Distance Calling Card!
November 19, 1998
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Dear Ben: I'm wanting to purchase some prepaid phone cards for some older relatives this holiday season, but I'm confused by all of the choices. Suggestions, o' common sense guru?
--Stacy K., Fort Worth
Dear Stacy: You've come to the right place. Long distance calling cards are a terrific idea for older consumers watching their budgets, as well as younger consumer/college students that have no budget to speak of, but beware!
The prepaid phone card business has ballooned into a $3 billion industry and with its success you can count on the con artists of the world to be close behind. Where ever you go shopping for your phone cards, be sure to take a calculator with you. Calculate your actual "per minute" charge by taking the cost of the card and dividing it by the number of minutes being sold.
For example at 7-Eleven, their cheapest card for domestic phone calls was $4.99 for 15 minutes, a rate of 33 cents per minute. Other rates ranged from 22 cent per minute at Office Depot to as much as 40 cents a minute on cards purchased at Walgreen's. Looks can be deceiving and not all cards are created equal!
Here's a checklist of potential abuse areas that you need to take a close look at when you're buying prepaid phone cards:
--Pricing: Is it per minute or per unit pricing? Some companies charge on a per unit basis and the potential for confusion is obvious. If it's 28 cents a unit and there are 3 units per minute, then the ACTUAL cost is a whopping 84 cents per minute! Assume nothing!!!
--Surcharges: Read the fine print to make sure that you don't get hammered for a surcharge that can range from 25 cents per call to as much as $1 for every call made using the card.
--Expiration date: Some cards are good for a limited period of time starting from the date the very first call is made using the card. Many companies do this on purpose, knowing that you'll forget to use the card within the time period. Consumers call it spoilage...prepaid phone card resellers call it profit.
--Billing: Like your cellular phone bill, you've got to find out up front how you're billed for calls. Do they bill in smaller increments (like 6 or 12 seconds) or do they simply round up to the next minute? Time is money. Ask first! If you don't see a Customer Assistance number anywhere on the card and can't figure any of these facts out by reading the packaging before you buy, then don't buy it!
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