Cash in on calling cards - prepaid calling cards

Home Office Computing, June, 1995 by L. Maxine Sanford

Prepaid calling cards are hot, and for good reason--they offer you all the conveniences of regular phone cards with none of the surcharges. For example, you'll pay $3.35 if you make a five-minute call from New York to Los Angeles using an AT&T credit card but only $2 using the average telecard.

These wallet-size cards come loaded with telephone time that you purchase in advance at a flat per-minute rate. You can buy them at convenience stores, supermarkets, check-cashing outlets, hotels, airport kiosks, and a number of other places.

"It's the cheapest way by far to call anywhere from anywhere," says Marc Ostrofsky, who publishes the trade magazine Telecard World.

The cards are simple to use. Dial the toll-free number on the card, and enter your PIN. Your prepaid minutes (or units) will be automatically debited from your card balance. With many cards, you get such value-added services as fax and voice mail or business, sports, and weather hotlines. Some companies even customize their cards so your staff can use them to call headquarters or your child can phone you from camp.

Phony Phone Cards But buyer beware--prepaid calling is largely unregulated. "Because of its high-income, low-dollar nature, a lot of thieves are in the business. The biggest players are the best," says Ostrofsky, whose suggestions include trying cards from these 10: SmarTel (617-3386000), Bayliss Creative Telecommunications (800-444-3161), GTS (800-9294301), EarthCall (404-523-5422), InComm (800-935-5522), LDDS Metromedia (800737-8423), ConQuest Telecommunications (800-955-1313), Telecard Inc. (212-8883360), Frontier Communications (800-2010922), and Western Union (800-374-0909).

The companies will tell you at which retail outlets their cards are available.

To help you navigate through the maze of 500 companies in this $850 million industry, Ostrofsky offers these pointers:

* Make sure the name and phone number of the issuer are on the card.

* Choose a card with a flat rate of 35 to 50 cents a minute (the industry average).

* Purchase cards without expiration dates. In many states it's illegal to sell prepaid cards that

* Call the Prepaid Calling Association (609-799-6253) if you have doubts about a dealer. The Princeton Junction, New Jersey, watchdog group is working to set industry standards.

* Hang on to your cards. A sidekick collector's market has emerged. A card issued at the 1992 Democratic Convention recently sold for $ 1,700.

Telecard Test It doesn't hurt to do a little investigative research of your own. "Try one out first," says Peter Buonaiuto from ConQuest Telecommunications, one of the industry's older members. "For only $3, you can buy a card to check that the voice quality is clear and that there's no busy signal--some carriers just don't have enough circuits to support all their users." Once you find a company you like, buy cards in larger denominations to get the best flat rate.