Pre-paid iphones at Best Buy (1 Viewer)

[Nelson Au]

Hey guys,

I hope some of you might have some better knowledge on this then I do.

I was looking at the Best Buy site and found some iPhone deals for a pre-paid iPhone SE 32gb at $184.99 and includes a $45 AT&T airtime SIM card. There is also an AT&T prepaid iPhone 6 32gb for $234.99 with an airtime SIM card.

These look interesting because I’d been looking around at options for my older parents who don’t have a cell phone. I’d considered putting them on my plan as a family plan for an additional $20 a month and give them my iPhone 6. But it needs the battery replaced. If I did that for a year, it’s $240.00. That’s enough for the new iPhone 6. And it has a new battery.

But what’s the deal here, how can these iPhones be so low cost? There is no contract to sign up for, no activation fee amd no credit check. And if this is real, the AT&T SIM cards claim unlimited data. This seems like an ideal deal. I’m still trying to figure out if there is a catch. I can’t tell so far. Seems too good to be true. Maybe the iPhones are refurbed or last years model?

Any insight is appreciated, thanks!

 

[Clinton McClure]

The iPhone 6 is a 4-year old phone and the SE is a 2-year old that has the guts of an iPhone 6s crammed into the form factor of an iPhone 5. That combined with being 32gb devices are the most likely reasons they are so inexpensive. As to whether they are refurbs, I’m not qualified to answer that.

 

[Thomas Newton]

But what’s the deal here, how can these iPhones be so low cost? There is no contract to sign up for, no activation fee amd no credit check. And if this is real, the AT&T SIM cards claim unlimited data. This seems like an ideal deal. I’m still trying to figure out if there is a catch. I can’t tell so far. Seems too good to be true. Maybe the iPhones are refurbed or last years model?

The $45 is a credit towards one of the prepaid plans. The cheapest plan with "Unlimited [4]" data is nominally $65 a month ($55 a month with AutoPay). The $35 a month ($30 a month with AutoPay) plan is cheaper, but imposes sharp throttling after you hit a 1 GB cap. In both cases, the actual bills will probably be a bit more than the nominal ones.

So let's say you spent $200 on a prepaid iPhone, then spent $35 a month on prepaid service. That would be about $575 (plus sales tax on the phone) for the first year.

https://www.att.com/prepaid/plans.html

Also, according to a Q&A on the AT&T site, the prepaid iPhone SE is NOT unlocked. I did not see an indication of this being an answer from an AT&T representative, but it makes sense. Other prepaid vendors have been known to lock phones that are much less valuable than iPhones.

 

[Nelson Au]

Clinton, thanks for the reply. I knew the phones are older models. What I didn’t check were the processors. The new iPhones use A9 chips while these prepaid uses A8. So that’s a factor for sure for the lower price of the phone.

Thomas, thanks for your input too. So you bring up something that’s not clear to me at all. What I didn’t see at all is that you’re saying these airtime cards are billed monthly? I didn’t know that. I thought it was like a GoPhone where you pay when the prepaid amount is used up and you refill the time. So this changes things. This is deceptive or I just didn’t know pre-paid phones require a monthly cost. I’ll have to gather more intelligence in this. Maybe replacing the battery on my old iPhone 6 and setting up a family plan is better.

Thanks!

 

[Thomas Newton]

Thomas, thanks for your input too. So you bring up something that’s not clear to me at all. What I didn’t see at all is that you’re saying these airtime cards are billed monthly? I didn’t know that. I thought it was like a GoPhone where you pay when the prepaid amount is used up and you refill the time.

With prepaid plans, you may not be on a contract, but you don't get unlimited "dial tone". Typically, you purchase "dial tone" for a month at a time.

There's no contract in the sense that you are forced to sign up for two years of monthly payments, with a fee for early termination. The carrier may encourage you to set up automatic payments, but you can take a pass on that, and just keep manually topping off your account with a credit card or airtime refill cards. However, carriers can, and often do, lock phones. Leave, and your subsidized prepaid phone may not be useful anywhere else.

 

[Nelson Au]

Thomas, thanks again. That was really helpful information. I see now, these airtime cards are good for a month and the user is free to continue to renew the card monthly. Either manually or automatically.

 

[Thomas Newton]

Yes, the plan renewals are good for a month. Note that the plan is associated with your phone and your prepaid account. If I loaded up my Verizon account with enough airtime cards or credit card payments to last for a year, then I would expect that 11 months' worth of credit would still remain after the first month.

That is, it's the "dial tone" service that expires, and not the money!

P.S. - I have since discovered that some prepaid plans have a "use your credit within 90 days or lose it" provision. So I guess that it DOESN'T pay to prepay too far in advance!

 

[Thomas Newton]

There's another type of card you may have had in mind: long distance calling cards. These were popular in the days of pay phones and per-minute long distance charges. You'd find a phone that already had "dial tone" service, and place the real long distance call via the calling card carrier.

With prepaid calling cards, the balance was tied to the card, and (balance permitting) you could use the same card for months at a time.

 

[Nelson Au]

Thanks again Thomas.

Though I’m not understanding your term, “dial tone service”. I know what a dial tone is as I grew up in the analog era. Do you mean the ability to make a call on a cell phone at will? Knowing you have service?

And yes, balance tied to a card is sort of what I had in mind, but more about the AT&T GoPhone service. There you paid say $100 and a cell phone SIM card is enabled and the time you use the phone is burned up towards the $100 paid until you run out. I believe AT&T has ceased this offering and replaced it with the pre-paid services. Which seems more expensive.

Using your example, one could pay up the amount to cover 11 months, but in this plan, you’re paying for the ability to use the cell phone time per month instead of the time. So paying for the 11 months, you have a valid plan till the end of the 11 month period.

Your information has been helpful. I have to think more about this verse adding my parents to my plan and make it a family plan. Or maybe another option.

 

[Thomas Newton]

Thanks again Thomas.
Though I’m not understanding your term, “dial tone service”. I know what a dial tone is as I grew up in the analog era. Do you mean the ability to make a call on a cell phone at will? Knowing you have service?

Yes, I'm using "dial tone" in that sense – that the phone company has enabled the phone "line" (whether analog, VoIP/digital, or cellular) so that you can place and receive calls (or use text or data). Most phones still simulate "dial tone" even where it does not technically exist.

And yes, balance tied to a card is sort of what I had in mind, but more about the AT&T GoPhone service. There you paid say $100 and a cell phone SIM card is enabled and the time you use the phone is burned up towards the $100 paid until you run out. I believe AT&T has ceased this offering and replaced it with the pre-paid services. Which seems more expensive.

I think you're right that AT&T replaced GoPhone with AT&T PREPAID. After searching for GoPhone, I came across an article indicating that GoPhone offered both monthly and pay-as-you-go plans.

https://www.nerdwallet.com/blog/utilities/att-gophone-prepaid-plans/

AT&T might have pay-as-you-go plans, too. Look under "Other Plans" on their Web site.

 

[Nelson Au]

Thanks again Thomas. I’ll be out running errands today. If I can, I’ll check out an AT&T store or Best Buy. Hopefully i’ll learn more.