Sunday, May 24, 2009

How to Choose a Phone Card

People new to Phone Cards often find it difficult and confusing to shop for them. Even veteran phone card users often get confused because calling card carriers have been very creative in devising hidden fees and other tricks so they can advertise extremely low per-minute rates and still make a profit. We have tried to list, define and explain the technical terms here so a calling card shopper can at least make an informed purchase and have a basic understanding of the market.

First, we would suggest purchasing calling cards from websites where all of the fees are fully disclosed in an easy to read format and where calling cards are rated by users. These sites do exist because there are still honest calling card vendors, carriers and marketers (web sites like Smart Global Call Phone Cards International display customer ratings for all of the phone cards they sell). The following are some other items to consider when choosing a phone card.

  • Check the rate (usually cents/min) to the destination you want to call. Remember that the rates listed or advertised are normally to house phones (land lines). Calls made to cell phones often have higher rates. Also, the advertised rates do not include calling card fees or taxes that can significantly increase the cost of a call.
  • Look for added fees, taxes and hidden costs. These should be listed in an easy to read format but can also be buried in the fine print. Remember you will likely pay more than the advertised rate when using a calling card so the trick is to minimize the added fees. Added fees will be called things like connection fee, disconnection fee, taxes, maintenance fee, pay phone fee and long call fee. These fees will vary between calling cards. Some calling cards will have all or most of these added fees and others will not have any of them.
  • Calling cards will also have different rounding or billing increments. These are often in 1, 3 or 6 minute increments. The billing increment can have a significant impact on the calling cost depending on how the calling card is used. A calling card with a one minute billing increment will charge a customer 4 minutes for a 3.5 minute call while a calling card with a 3 minute billing increment will charge a customer 6 minutes for the same call. The cost of a call is rounded up to the next billing increment so; in general, a lower billing increment is better.
  • Calling card fees are typically minimized if calling cards are purchased in smaller denominations and used for one call or over a short period of time. In general, calling card fees do not start until the calling card is used the first time. Many companies offer calling cards in denominations of $5, $10, $20, $50 and even $100. We recommend trying a small denomination card ($5 to $10) before making a large purchase. Also, it is generally better to buy several small denomination cards than to purchase one with a big denomination.
  • Calling card call quality depends on the international carrier used and is not always equal between vendors to a given location. There are many international telecom carriers and call quality will vary between carriers. There are generally three levels of call quality (referred to as Tier 1, 2 and 3) with regard to telecom carriers. Tier 1 carriers offer the best quality but they also charge the highest rates. Therefore, in general, calling cards with the lowest advertised rates also tend to have the lowest call quality because they use lower Tier carriers.
  • Check for local access number availability. Many cheap calling cards have low per minute rates but have few local access numbers and charge 1 or 2 cents per minute for using a toll free access number.
  • All calling cards carry an FCC imposed fee for using a pay phone. However, the rate will vary between calling cards (it ranges from around $0.49 to $1) so check this rate if you plan to use a pay phone.
  • Calling cards typically have an expiration date so be sure and use the card before it expires.
  • It is a good idea to purchase calling cards from vendors that have 24/7 customer service. If nothing else you may have a question.

So, how to use this information? There are a few things to consider. First, try to compare calling cards on the same basis. When calling card rates are adjusted for the above mentioned fees, taxes and billing tricks, many calling cards with very cheap advertised rates actually cost as much or more to use than a moderately priced card with higher call quality. Remember, a calling card that cannot be used or has extremely poor quality is worthless to the user. Any money spent on a purchase is lost.

There are a few hybrid phone cards or prepaid long distance carriers like Tel3Advantage. These are popular with frequent international callers since they offer low rates, high call quality and convenience. The Tel3Advantage Flex Plan also comes with all the bells and whistles at no additional cost. The Tel3 plan is also one of the most honest plans we reviewed. They feature a one-minute rounding interval and have no hidden fees or taxes. They also have a wide network of local access numbers in North America. They also have a toll free access number but charge an extra 1-cent per-minute for using toll free access.

Consumers have become wise to many of the hidden fees and tricks discussed above and, as a result, there are several newer calling cards on the market that have high call quality at reasonable rates. They also tend to have minimal added fees so the advertised rate per minute is closer to the actual rate charged when the card is used. Many of these are hybrid calling cards that are really a virtual calling plan with features like PIN-less dialing, online call history, speed dial and a large network of local access numbers. They are also re-chargeable for customer convenience but also because calling card vendors are trying to build brand loyalty. By offering low cost, quality and convenience they hope to retain customers. It seems that some calling card carriers have rightly concluded that it is better to make a little money off a large number of satisfied users over the long haul than to make some quick money ripping off a few customers one time. Alas, the free market even works with respect to calling cards.

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