No, the police can not have you Track phone traced. They can not get enough data, and information on it. As long as you pay with cash, you should be fine. Just always be careful. Try texting rather then calling because, sometimes the police can track your call by finding out what "Signal Tower" your phone used to recieve signal to recieve/ and or make a call.
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Yes. A mobile phone is tracked by the signals it receives and what transmitters they are near at the time. It doesn't matter whether your phone is prepaid or billed. You can have the exact same phone as another person who has a bill phone, so the way they are tracked will be the same.