What's the Catch With Off-Brand Prepaid Wireless Services?

In this edition of Ask Maggie I explain the pros and cons of using “off-brand” prepaid wireless services, which are owned by the national carriers themselves.

Dear Maggie,

I’m an AT&T wireless customer. I just found out that Cricket Wireless is owned by AT&T. I had no idea! I checked pricing and it’s about half what AT&T’s regular service costs. What’s the catch? It got me wondering if the other major carriers offer something similar. If it’s the same service and the same coverage, why not? Right?

Thanks,
Feeling Enlightened

Dear Enlightened,

You’re definitely on to something. For years prepaid wireless services, which require you to pay upfront for all your voice minutes, text messages and data, targeted people with poor or no credit. More recently, savvy customers have realized there are bargains to be had in prepaid.

Prepaid service can save consumers a bundle. But what are the trade-offs?

There are dozens of prepaid brands on the market. Many, like Tracfone, have existed for years by leasing access from the big four carriers to serve lower income consumers. With more consumers looking at prepaid as a legitimate option, the bigger carriers have amped up their low-priced services, typically through a separate prepaid brand like AT&T’s Cricket. There are particularly good deals if you’re looking for a single line.

You’re smart to be cautious. There are some catches you should be aware of before you ditch your old plan for a low-cost one offered by your carrier.

To better explain the costs, I’ve created comparison charts for each of the four major carriers.