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Newly Budget-Minded Turn to Prepaid Cell Phones

As the economy soured, Jerri Konczak of Duluth, Minn., looked for ways to reduce expenses.

Her family cut back on fast-food trips and downgraded its cable-TV service. Then Ms. Konczak dropped her cell-phone service and got a prepaid phone — not an easy switch for someone accustomed to nearly unlimited talking and texting.

At first "I thought I was going to die," says Konczak, as she was forced to slash her cell-phone use.

The 46-year-old says she had to put an end to "frivolous calls," like phoning her sister to pass the time as she drove to the grocery store, but which contributed to her $85 monthly wireless bill.

She now pays $10 a month to Virgin Mobile USA Inc., a prepaid wireless carrier that charges based on minutes used instead of a monthly fee. With about 100 minutes available per month, she uses her new phone mainly for emergencies and short calls.

Prepaid, or pay-as-you-go, phones used to be the province of consumers whose weak credit didn't qualify them for traditional cell-phone plans. But lately, a growing number of people looking to trim household budgets appear to be discovering them.

Price is a big reason. The average monthly wireless bill for an individual in the U.S. is $48.54, according to industry group CTIA, but data plans, text messaging and other fees can push charges for some people above $100.

• Click here to read the full story in the Wall Street Journal.

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