A teenager and a cell phone may be one of a parent’s worst financial nightmares. Overage charges that incur when more than the allotted minutes are used per month can be downright ridiculous, and many parents find themselves with a bill that’s hundreds of dollars.

One way to avoid such pitfalls is to use prepaid cell phones. These types of prepayment cell phone plans, which don’t require a contract, are quite popular in Europe, and they are beginning to gain popularity in the United States as well. And they may not just be for those young people in your family who could tend to chat on and on without consideration of the consequences; prepaid cell phones can be an attractive alternative to contract plans for other individuals as well. One good alternative is to buy a Tracfone cellular phone .

But just how do prepaid cell phones work? There are a few different ways. Some companies that offer prepaid plans charge a basic rate that breaks down to a particular number of minutes. These simple and straightforward plans make it so easy to know exactly how much each minute on the phone is costing you - just divide the price by the number of minutes the plan gives you.

Another method of charging for prepaid cell phone use is a fixed charge for every day that the phone is used, and then charging per minute on top of that. This could be an excellent option for an elderly person who rarely used a cell phone, for instance, or for an extra phone in the car that’s only used for roadside emergencies.

Some prepaid plans allot you a certain amount of minutes per month; if these minutes aren’t used, you lose them. (By the same token, and back to the teens, once the minutes are used up that month, that’s it.) Other plans allow you to rollover unused minutes to the next month. There are many options out there, and you will need to analyze your type of cell phone usage with the various ways you could utilize prepaid cell phones. In any case, it’s worth looking into. You could save a bunch. If you buy a cheap used cellular phone with the plan you could save even more.