hey�re compact, colorful, and collectible. They�re given away as mementos at political conventions, stuffed into boxes of bran cereal, and pasted on bags of fertilizer. They�re available in a dazzling array of designs that can range from the sublime (Ameritech�s "Claude Monet" collectibles) to the silly (MCI�s "Dilbert" series).       The question is, are prepaid long-distance phone cards merely marketing gimmicks? To be sure, about 45% of phone cards are promotional freebies or snapped up by collectors. But during the past year, the biggest growth in this $2 billion industry has come from sales to consumers who�ve discovered that prepaid cards are a convenient and relatively inexpensive way to make long-distance calls away from home and office.       Five years ago, few people had heard of phone cards. Today, you can buy them at gas stations, supermarkets, discount stores, post offices, airports, and on the Internet. Collectors have magazines, newsletters, auctions, and on-line sites such as the Phone Card Market Report.       Travelers make up a large share of phone-card users. But cards also are finding a niche among the as many as 30 million Americans who don�t have access to a long-distance carrier, says Howard Segermark, executive director of the International Telecard Association, Washington, D.C.        Deciding which phone card to buy can be a major headache. New issuers continually enter the market, pricing is all over the board, and consumer protection is spotty at best. Here are several questions you should ask, and answers that can help you make a safe and informed purchasing decision: What�s a prepaid phone card, and how does it work? How much does a phone card cost? What�s the difference between a prepaid phone card and a calling card? What happens when a phone card runs out of time? Do phone cards provide other benefits? How can I be sure a card issuer is reputable? Whom do I contact if there�s a serious problem with my card?

Pricing is       all over the board,       and consumer protection       is spotty at best.

What�s a prepaid phone card, and how does it work? A prepaid phone card is a type of debit card. You pay in advance for a set amount of long-distance minutes. The telephone carrier subtracts the length of each call you place using the card from the total until the card is "dead."       Phone cards come in two flavors. The first has an internal memory, from either an encoded magnetic stripe or an integrated circuit chip; you must swipe it through electronic readers on specially equipped phones.       The second, and by far more common type, uses a remote computer to track calls. To access the computer, you dial a toll-free number from any Touch-Tone phone, enter a personal identification number (PIN), then dial your party. Both the toll-free number and PIN are printed on the back of the card. Voice prompts lead you through the process and indicate how much time remains on a card.

What�s the difference between a prepaid card and a calling card? A calling card is a form of credit card--you phone now and pay later. Average prepaid phone card rates are competitive with daytime long-distance rates for calling cards or collect calls. As long as there aren�t additional charges, however, using a prepaid phone card often is less expensive than using a calling card or calling collect. That�s because calling cards usually levy a surcharge that can add up to 90 cents; collect-call surcharges range from 95 cents to $2.30.       For long conversations, however, a calling card may be a better option. First, the longer the call, the less the surcharge affects the overall bill. Second, depending on your phone carrier, you might be able to take advantage of special weekend or nighttime discounts. And third, you don�t have to worry about running out of time.       Prepaid cards do provide a security advantage: When a card is lost or stolen, you lose only the balance on your card. A lost calling card may cost the owner untold dollars in unauthorized charges.

What happens when my card runs out of time? Most phone cards are disposable. But many issuers now market "rechargeable" cards, which enable consumers to restore a card�s value either by credit card or a cash payment at the point of sale. Some issuers even will combine the remaining few cents from several cards onto a new card.       If you can�t find a rechargeable card, estimate how much calling time you need and buy the appropriate number of minutes. Beware, though, that most cards expire within six months to a year after purchase. What you don�t use, you lose.