You thought you could just wonder into a retail store or click a few buttons on a website and purchase a phone card?
It’s actually tougher than you think and a lot of customers get ripped off.
In this guide, I’ll show you what to look out for when buying an international phone card.
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1. Not all calling rates are created equal
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Obviously, the call rates are the top consideration for most customers want to use an international phone card but in my experience this should actually be one of the last considerations.
When purchasing a phone card there are 3 important metrics to understand:
The per minute rate
“The per minute rate is how much you will be paying per minute this does NOT mean you will be paying every minute; this is an important distinction.” JT, nzphonecards.co.nz
Minute rounding
Minute rounding simply means the frequency at which you will be charged, few phone cards actually charge you by the minute, most will charge you in blocks of time like every 3 minutes. I will touch on how phone card companies will use this to skim money from their customers in the next section, but for now just know that you will likely not be charged per minute but in blocks.
Connection fees
It’s very common in this industry to charge customers every time their phone card makes a successful connection or even disconnection called a disconnection fee.
On the surface this may seem like an obvious scam and sometimes it is but in other cases it is not.
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Service charges
According to a study by a consumer watch dog group a staggering 48% of phone cards charge a service charge fee.
Let me explain what this is.
Typically, when you purchase a phone card you need to activate it, this is usually initiated by making a phone call, when this is done it triggers a service charge fee which may begin that day or it may come out once a week a month or in extreme cases every two days regardless of whether or not you are actually using the phone card.
Why do phone card companies charge a service fee, exactly?
If you ask the provider they will tell you that it is to maintain the service but in reality the phone card industry operates on thin margins (depending on where their customers are calling to of course) so these fees are just a way to pad out the profit margins, kind of like how gas stations (another industry that runs on laser thin margins) will try to upsell you some snacks when you pay for your gas.
Reactivation fees
Most phone cards come with an expiration date, this is normal for most things, passports, driver’s license, credit cards, this is common practice across all industries.
These phone card companies will ask you to recharge your telephone card every 3, 6 or 12 months to keep it active.
But sometimes, customers forget to recharge their card and so if they want to reactive it they will be charged a reactivation fee, essentially a penalty for being a bad customer.
Keep in mind, this does not cost the company anything to reactivate the card, they just click a button and it’s back in action again.
This is essentially another way to drive profits.
Large minute rounding
Call rounding is a critical feature that is missed by a lot of customers.
When you purchase a phone card you are essentially basing your buying decision on how much you are going to be paying per minute.
What you will often miss is how those minutes are charged.
For example, you may have a card that charges 10 cents per minute but has a call rounding time of 15 minutes.
This means that you are not charged every minute but every 15 in other words $1.50 every 15 minutes.
This means that if your call only lasts one minute then you will be charged the full 15 minute or $1.50 which means that you are paying $1.50 per minute.
If you talk for 16 minutes then you are charged 2x 15 minute blocks.
You would need to time your calls to end on the 14th minute to get the most value from your card, got your stop watch handy?
3. Customer service – this is ESSENTIAL
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Out of all the main points covered you can find the best phone card for your specific situation by using this final tip: contacting the customer service team.
If the phone card company does not have a customer service team then find another company, it just that simple.
Sure you can flick through phone cards in the retail store or browse the website but chances are you are going to miss something and you are going to have to call the company and go through a process to get it resolved.
My recommendation is to call the phone card company and ask them questions like the following:
- I’m calling to [country] what card can you recommend?
- Do you have any hidden fees like service charges, reactivation fees, etc.?
- How long to resolve technical issues? (poor audio quality, call drops, no connection, overcharging, cross lines, etc.)
- Are you available during public holidays?
- What happens to my credit once my phone card expires?
Asking each of these questions will prevent 90% of the headaches that can come from buying and using a phone card.
Most phone card sites are set up to sell products rather than find the right fit for each specific use case.
Conclusion
While the phone card company has received a bad reputation over the years 90% of this can actually be solved before you make a purchase.
By ensuring that the company has an active and responsive customer service team and that you ask those 5 basic questions, you will dramatically reduce the number of problems that could arise.
