Hey Buddy, Buy Some Time? -- Prepaid Phone Cards Are Everywhere, But Are They A Good Deal For Everyone All The Time?

Prepaid phone cards, the new peacocks of the telecommunications industry, come in brilliant plumage such as passionate purple, hot pink and acid green.

They've burst on the scene by the dozens, maybe more, in the past several years for sale nearly everywhere: airports, groceries, drug stores, gas stations, discount warehouses - even in Uncle Sam's post offices.

It's a wonder they aren't being served up with lattes on Seattle's street corners. But maybe that's next!

These plastic beauties - especially popular with travelers - will buy a certain amount of calling time - local or long distance, domestic and international.

Here's how they work: You dial a toll-free number, punch in an access code or account number, then dial the number you want to reach.

For most cards, "domestic" is anywhere in the United States, including Puerto Rico, Alaska, Hawaii and the U.S. Virgin Islands.

The biggest sellers are the $5 and $10 cards, which give you 15 and 30 minutes of calling time. Most companies round up your call to the next full minute regardless of how long you talk. The cost deducted per call is based on time used plus applicable surcharges, such as those assessed for using a pay phone. Using these cards, a minute of local and domestic long- distance time costs the same. (For information on international calls using prepaid cards, see Page K 3.)

Before and/or after each call, you're told how much time remains on the card; when the card is about to run out, you'll be warned during the call. You can recharge many of these cards electronically by giving the carrier a regular credit-card number, such as Visa or MasterCard, or you can go out and buy another card. Some retailers give bonus minutes for coming to the store for a recharge.

The fact that there are scores - perhaps hundreds - of cards from which to choose, makes it difficult to determine which has the best deal for you.

More than 60 telecommunications companies have registered with the Washington State Utilities and Transportation Commission to sell prepaid phone cards. Nationwide, there are about 500 companies, according to the International Telecard Association, an industry group.

Among the card sellers are numerous retailers - convenience stores, groceries, drug stores, discount warehouses, gas stations, boutiques and others - with private label cards.

Retailers like selling cards because the store gets paid 20 to 30 percent of the card's face value, according to an industry source.

We travelers like them, too.

A recent AT&T survey said two out of three people on vacation call home at least once a week. Other big users are college students, immigrants and consumers on fixed or low incomes.

Talla Mansoori of Redmond, who came here 25 years ago from India,said she used a prepaid card to call relatives back home, because it cost from 49 to 52 cents a minute. That was much cheaper than the $1.24 peak, per-minute charge and the off-peak, per-minute charge of nearly 80 cents offered by her residential long-distance carrier.

Unfortunately the prepaid card company went out of business before Mansoori had used all the time she paid for. But it was a good deal while it lasted, she said.

Craig McDonald, a sophomore at the University of Idaho, likes prepaid cards because "I can't get myself into trouble as far as budgeting goes. Once the card is used up, it's gone." McDonald estimates about 50 percent of the students he knows in Moscow use prepaid phone cards.

Linda Acob of Yakima and her boyfriend have had their telephone company put a long-distance block on their home phone. Instead, Acob uses prepaid cards to call friends in Montana and California, and when she's traveling.

"This way I don't have to be surprised by a big long-distance bill at the end of the month," she said.

"And it's almost like a cell phone in your back pocket. You've got nearly the same convenience, but less money invested."

Advantages for travelers

The convenience of prepaid cards is a big factor for many travelers.

Some don't like to have to fumble for correct change at a pay phone. In some foreign countries, pay phones no longer accept coins, so you must use some kind of card.

For other consumers it's a liability issue. They'd rather risk losing a $10 or $20 prepaid card, than having the hassle of challenging fraudulent charges on their regular credit calling card, if that card is lost or stolen. As with other credit cards, your liability on a phone credit calling card is $50, if it's lost or stolen.

Prepaid phone cards come with all the usual retail wrinkles. Occasionally stores offer phone cards at a discount as a "loss leader" to lure shoppers to the store.

Some companies list the dollar value of the card on its face; others list its worth in minutes. That's because the value of some cards fluctuates.

For instance, in the past year a Talk N Toss card sold by Safeway Stores for $5 has bought various amounts of calling time - 10, 12 or 15 minutes - depending on carriers' per-minute rates at the time, according to representatives of the grocery chain and BLT Technologies Inc., the telecommunications company involved.

Retailers often reward returning customers with bonus minutes. For example, Rite Aid Pharmacies will give you a 10 percent bonus in minutes if you return to the store to recharge your card when it's used up, rather than buying another label card.

Walgreens gives a 20 percent bonus if you return to recharge a card.

Then there are retailers who charge the customer more than the telephone carriers' "suggested" retail price.

For example, AT&T's suggested retail price for its 60-minute prepaid phone card is 33 cents a domestic minute. But you won't get that price if you buy it from AT&T Wireless, as I did. My card cost 35 cents a minute.

Are these prepaid cards a good value? How do you know whether you're getting the best per-minute price?

Good value or not?

If you're looking for straight dollars-and-cents savings, the prepaid cards may not be the best deal.

To find the best deal, compare the rates and surcharges on prepaid cards with the credit calling cards associated with your home long-distance service. But don't overlook new promotions.

And new deals for both prepaid cards and

credit calling cards are being offered virtually daily since the telecommunications industry has been deregulated.

For example, LCI International recently offered prepaid cards that bill in six-second increments after the first minute. Other carriers charge for a full minute, regardless of how long you talk. The LCI card's per-minute domestic rate is 25 cents, with a 50-cent surcharge from pay phones. It's available at Exxon stations.

Later this month US West will offer a prepaid card in groceries and convenience stores. The US West $10 and $20 cards have a flat rate of 25 cents a domestic minute and a 30-cent surcharge at pay phones. US West also is offering new residential customers a 30-cent per-domestic-minute rate on its Express Calling Card, with a 30-cent surcharge from pay phones. Sprint is the underlying carrier for the US West card.

However if you are a longtime US West customer you won't get the new calling card rate unless you call and ask for it. And yes, that seems unfair, but assert yourself: Ask for the best rate.

Do your homework

If you're willing to use a credit card, another good deal is VoiceNet, a Pennsylvania corporation that offers 17.5 cents per minute and bills in six-second increments.

VoiceNet requires that you have a major credit card, a home phone and address in the United States. VoiceNet bills your calls to a credit card and charges a one-time activation fee of 99 cents.

While the Washington State Utilities and Transportation Commission requires sellers of prepaid phone cards to file their rates at its Olympia office, the watchdog agency has just begun to look at establishing ground rules for consistent disclosures by these companies.

That means you had better do your homework before buying a prepaid card.