by 
The Curious Bag
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A pay as you go cell phone allows users to buy wireless minutes in prepaid amounts without a contract or monthly plan fee. Consumers who use a wireless device infrequently may find a prepaid cell phone more cost effective than traditional wireless plans.
Significance
Pay as you go cell phones do not require a credit check so a consumer with credit problems can still purchase a cell phone and benefit from wireless service.
Equipment
Consumers must purchase a pay as you go cell phone from a wireless provider that offers prepaid service.
Service Providers
According to Prepaid Reviews, service providers for pay as you go phone plans include T-Mobile, AT&T, Boost Mobile, TracFone, Verizon and Virgin Mobile.
Benefits
A pay as you go cell phone does not require a consumer to sign a contract, so early termination or cancellation fees do not apply if a consumer decides to switch to traditional wireless service.
Considerations
Consumers who purchase higher denominations of minutes typically receive a lower per minute price, according to the Utility Consumers' Action Network.
Source:
Prepaid Reviews: Best Rated Pay as You Go Phone Plans
Utility Consumers' Action Network: Pre-Paid Wireless Phone Service
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