It’s Best To Avoid Cheap Phone Cards, Here’s why


Phone cards are great because they allow you to call virtually anywhere in the world at insanely low calling rates. One of the traps that consumers typically fall into is searching for the lowest rates. In this article, I’ll outline why you should probably avoid these phone cards.

Hidden fees


The phone card industry is caught in a bit of a trap in one way they want to offer the cheapest calling rates for customers who want to make calls overseas on the second hand because they’re working on such tight margins they have to find creative ways to build that margin back in to their product so they can keep their head above water.

One of the go to strategies in the phone card industry is to use hidden fees.

Connection fees

Connection fees are probably one of the most common fees that you’ll see so while 99% of the time these are not actually hidden, they do state them clearly (typically next to the calling rate) it still does manage to catch people off guard.

So, what is a connection fee?


A connection fee is a small charge that is deducted from your phone card every time you make a successful call to either a person or even their voicemail.

There is also something called a disconnection fee which operates in the same way as a connection fee but instead of being charged at the start of the call you are charged at the end of a call. While I’m not a huge fan of phone cards that come with connection fees in a lot of cases these cards actually provide a lower rate than cards that come without connection fees.

“If you’re making long phone calls somewhere between 40 to 60 Minutes plus then a connection fee card may be the best option but always check to make sure that you’re actually getting a lower rate than phone cards that come without a connection fee.” A. Barrett,

Service charges

Service charge fees are another popular strategy used by phone card companies in fact in Australia there was a study done where 48% of phone card companies actually use a service charge fee.

What is a service charge fee?


This is a deduction that is made to your card at set intervals typically this can be monthly weekly or daily.

These charges are made to your card regardless of whether you’re actually using it or not and commences once you activate your phone card.


Slippage is probably one of the main places where a phone card company is actually make money.

What is slippage?


When you order a phone card the chances of using up every single sent on that phone card is very slim in almost every case by the time you’ve finished using your card there will be a little bit leftover which will not be enough for you to make another call so the card will naturally expire which means the calling card company will take whatever money is left over on that card.

Expiration of phone cards

Virtually all phone cards have an expiration date which is not strange, I mean virtually every card you hold has an expiration date which is there for legal reasons.

The difference with phone card companies is that in most cases whatever credit balance you have available on your card at the time of expiration is basically forfeited to the phone card company.

While this is not ideal, this is common business practice and is true for the phone cards that I have so I’m always mindful of how much credit I have available and I always make sure that I use up as much of their credit as I can before the card expires.

I would recommend finding a card company that allows you to keep your balance whether the card has expired or not and these cases you will need to reactivate your phone card with a top-up but once you have topped up your card you are able to carry that probalance forward on to your new balance these are the phone can’t companies that I’d recommend keeping an eye out for.

Reactivation fees


If your phone card does happen to expire and it is also a phone card that can be recharged not only do you lose your credit upon expiration but you are also likely need to pay a reactivation fee if you want to keep your PIN number.

Again my recommendation is to look for phone card companies that are not only do not absorb your remaining balance but also allow you to reactivate the card without charging any additional fees to do so.

Cutting corners

If you’re looking for the cheapest calling card rates then you have to get comfortable with the idea that these particular companies while offering you a nice low-rate will cost you in other important areas.

Carrier lines


One of these key areas is running into technical issues such as not being able to connect, having a noisy phone line, having call drop-outs, getting connected to a totally different person in a different country or even being overcharged. With a lot of the cheaper phone card companies they look to cut corners on investing in their own technology and one of these key areas is the carrier lines.

A Carrier line is simply a line that connects your phone call to the person that you want to speak to and if there’s a problem with their carrier line you want to make sure that the phone card company that you’re with are able to switch that carrier line out for a brand new one so that your call can get up and running as soon as possible.

Unfortunately a lot of phone can’t companies only have a very limited number of carrier line so if there are problems on those lines it could take anywhere from a few days to a few weeks for that problem to be resolved.

My recommendation is to call up the customer service line and ask them how long it takes to resolve any technical issues or even ask them if they have multiple carry lines. The best phone card companies are able to resolve any technical issues that day or sometimes within a few minutes.

No customer service

Unfortunately a lot of phone card companies especially the ones that sell their products in physical stores don’t come with a customer service team which is an automatic deal breaker for me because if there are any issues with the phone card I want to know that it can either be resolved or at the very least have my money refunded.

I would rather pay slightly higher calling rates just to give me peace of mind to know that if they if there are any other problems I can have it resolved quickly and easily with the least amount of frustration.