Telephone Calling Cards 101

All telephone calling cards are not created equal.

Telephone calling cards are used to make local, long distance, and international calls from any telephone. They fall into two basic categories: prepaid and standard. To confuse matters, standard cards are often referred to simply as "calling cards." The standard calling card is offered by a major telecommunications provider such as Qwest or AT&T. Frequently employers will make standard calling cards available to their employees. An individual can also obtain a calling card from his or her telephone service provider, but the rates are usually more expensive than other options, such as purchasing a prepaid card. For an example of standard calling card rates through a major telecom company, see theAT&T Calling Card webpage.

The basic difference between these two cards, as you may have guessed, is the method of payment. Prepaid cards have a specified number of minutes available on the card. You can buy them in discount, grocery, or convenience stores. You can also buy a prepaid card over the Internet. Standard calling cards, on the other hand, are obtained from your telephone service provider and the charges are billed to your account.

The table below shows a rough comparison of standard and prepaid calling cards.

There are some advantages to using prepaid calling cards instead of standard calling cards. Besides being less expensive, you can pay cash for prepaid cards. You can pay whatever you can afford and not have the risk of incurring a large bill, such as might happen with a standard calling card. Prepaid cards are also transferable, and can thus be given as gifts.

Sounds pretty good, huh? Well, you may want to think twice before running out to buy armloads of prepaid calling cards. When you purchase a prepaid calling card, you should check the fine print for the various fees associated with making a call. You might see an ad for a calling card that posts an extremely low per-minute charge (for example, 1.5 cents per minute). Be careful, because there could be access charges, maintenance fees, and billing increments of several minutes that make it more expensive than a card with a higher per minute charge. See the U.S. Federal Trade Commission articleBuying Time: The Facts About Pre-paid Phone Cards.

For advice on buying inexpensive phone cards, see theAsk Dave article What's the best telephone calling card deal? and the Consumer-Action.org article Getting the Best Value from Prepaid Phone Cards.

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