BE CAREFUL WITH PREPAID PHONE CARDS.

Byline: Deborah Adamson Daily News Staff Writer

While on vacation in Fort Lauderdale, Fla., Martha Welshans and her husband were glad they didn't have to fish for change to call home.

Instead, they pulled out a prepaid phone card to dial up California.

``We used it to call home,'' said the Palmdale resident. ``It was convenient and it was nice.''

The cards are showing up everywhere: supermarkets, convenience stores, college book shops, department stores and in promotions.

In just four years, phone cards have ballooned nearly into a $1 billion business.

The cards are purchased at a set price, usually in denominations of $5, $10, $20 and $50. Cards give callers a specific number of minutes.

But not all cards are created equal.

Some allow international calls, while others do not. And with per-minute rates ranging from 25 cents to 45 cents, it pays to shop around.

Consumer Action, an advocacy group in San Francisco, found that major phone companies tend to charge more: AT&T's rate is 45 cents a minute, the same as MCI's maximum rate. Sprint charges 33 cents per minute.

The lowest rates were charged by ACMI, LDDS Phone Pass and TransNational.

However, going with a well-known carrier may be wiser, said Ken McEldowney, executive director of Consumer Action.

``In some instances, companies went out of business after selling the cards,'' he said.

Make sure to check the phone cards' expiration dates, McEldowney said.

Since prepaid phone cards are used like cash, no refunds are available in most cases if they are lost or stolen, the consumer group said.

Unlike telephone calling cards - those issued by your carrier - prepaid phone cards don't have surcharges.

Many calling cards charge up to 80 cents per call - on top of the cost of the phone call.

Here are some tips from Consumer Action:

At pay phones, use the cards only for long-distance calls whether in or out of state. Use coins for local calls. In California, you can talk for 15 minutes at a pay phone for as little as 20 cents.

Call during the day to get the most value from your cards. Daytime rates tend to be higher. Since your phone card has a set rate no matter what time you call, you might as well call when it's most expensive.

Ask if the per-minute rate is good for all states. Some cards charge extra for calls to Alaska and Hawaii.

Make sure cards don't have activation fees and only start to charge you once your calls connect. Some cards start counting when you're still dialing. Look for cards that charge for ``connect time only.''

For questions or problems, call the ombudsman hotline at 1-800-333-3513.

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Photo: (color) MCI eschews a plain design for its phone car d, using a dramatic scene from the film ``Independence Day.''