With the recent economic downturn, headlines have been indicating that an increasing number of people are skipping on fixed cell phone plans that carry a heavy cost and opting instead for pay-as-you-go or prepaid cell phones. For many years, prepaid cell phones have been viewed as the option for those with a very limited budget or poor credit. For this reason, some consumers have avoided them.

Now with the need to save, some of these more reticent consumers are considering their options more carefully. Here I will address some of their most frequent questions about prepaid cell phones.

1. Aren't prepaid cell phones more expensive?
In some instances a prepaid cell phone can cost consumers more up front than the phone they can get through a traditional provider. Traditional providers offer many free phones because they are subsidized. In the end, the consumer pays for that phone through their 2 year commitment.

There are a number of prepaid phones that can cost consumers as little as $10 so there are certainly some economical options if the upfront cost is a primary concern. Of course, these inexpensive models are rather basic and generally won't offer entertainment features or web browsing.

2. Aren't prepaid calls more expensive?
Prepaid providers generally provide two types of "plans". Pay-as-you-go and then monthly plans that offer calling in bundles. Calls are particularly expensive in the pay-as-you-go category. Calls may cost 10 cents per minute which is very high compared to what you'll find in a traditional cellular plan. However for those who make few calls, this can still be a very economical option. Most traditional plans offer large bundles of minutes that occasional callers will never use; therefore they are paying for unnecessary service. A $40/month plan that provides 500 minutes of calls isn't really economical for someone who only uses 40 minutes of calls. Even at 10 cents per minute ($4/month) the pay-as-you-go option would save them $36.

Of course, consumers still need to be aware. For instance some prepaid providers will charge a per-day fee as well, but certainly not all of them do this. It's important to know the conditions of the agreement.

Additionally, under the monthly prepaid plans, consumers will find that the cost of prepaid calling goes down significantly. In fact, they have some of the least expensive unlimited plans available.

3. Isn't it hard to keep track of the time you use?
It's not difficult at all. You can log into your account and see your balance at a any time. Additionally, if you opt for the pay-as-you-go option, you don't have to worry about exceeding your budget. When you run out of time, you have to purchase more minutes, you won't be surprised by a big bill at the end of the month.

4. Aren't the phones available through prepaid plans inferior?
There are certainly many basic phones available through prepaid cell phone providers. On the other hand, they do have multimedia and smart phones available. You won't get an iPhone or the latest Sony Ericsson Walkman phone, but you will find Blackberry smart phones, the LG Rumor Touch, and other nice phones available through prepaid providers.

5. Can I get text messaging and web browsing services through a prepaid provider?
Yes. Prepaid providers offer both of these options, but again, if you choose a pay-as-you-go option text messaging and other data services will be expensive. Under a bundled monthly prepaid plan, prices will be much more attractive. Of course, you also have to select a phone that will offer the necessary features.