A pay-as-you-go SIM card is only usable in a contract phone that uses GSM technology and has been unlocked. To unlock a contract phone, you need the unlock code for your specific model.
Two types of cell phone technology are used by most cell phone service providers: Global System for Mobile Communication technology, or GSM, and Code Division Multiple Access, or CDMA. Cell phones that use CDMA technology cannot be unlocked. To unlock a GSM phone, the old SIM card should be replaced with the new pay-as-you-go SIM card. Some phones require that a numeric code be entered into the phone to complete the unlock process. This code is available from the original service provider or a third party.