People with family or friends living in another country spend more than $2 billion per year on prepaid phone cards. They look like a cheap way to make international calls. But a Consumer Reports investigation finds it's buyer beware.
Consumer Reports analyzed more than 130 prepaid phone cards, most costing $2 to $5. Three-quarters of the cards didn't have information telling you how much it cost to make a call. You usually never found out until you were on the phone.
And Consumer Reports found the amount of calling time varies tremendously. For example, one $2 card gave 200 minutes to call Mexico City. Another $2 card gave only 5 minutes.
The cards also can have lots of fees, including a fee for connecting or disconnecting or calling on a cell phone or calling from a pay phone. There can even be a daily maintenance fee.
The fees can really eat into the value of the cards. Several were completely drained before Consumer Reports ever made an international call. In some cases, Consumer Reports was able to get the fees reversed, but only after calling customer service.
Consumer Reports says that if you frequently make calls overseas, there are better alternatives. You can use Skype on your computer or smart phone to call overseas for modest rates, which are clearly spelled out on Skype's website. And if you and the person you are calling both use Internet service, the call can be free.
Another option for people who regularly call overseas is to use an international calling plan through your cell phone or landline provider. For a small monthly fee you can get calls for pennies per minute.