Abstract: A method and apparatus for prepaid phone card activation and billing is disclosed. Particularly, a method and apparatus for prepaid phone card activation and billing is disclosed, which provides benefits to a phone card client and to a phone card company. An improved phone card is disclosed that has a magnetic strip for encoding prepaid phone card information adapted for reading by a point of sale terminal. At the time an improved phone card is to be sold or otherwise transferred, the card may preferably be read through a point of sale terminal which may be in communication with a centralized computer. The centralized computer may compare information encoded on the card with information stored in a centralized database and with information from the point of sale terminal to verify that the card is being sold or otherwise transferred rightfully. The centralized computer may then authorize or deny activation of the card.