As of 2011, US consumers accounted for 321 million cell phone subscriptions—that’s more than one phone per person. All this service comes at a heavy price. According to JD Power, the average cell phone user pays $78 per month, or $936 per year. For those who choose smart phones with internet access, the cost jumps to $1,500.
Try this three part approach to slash costs. First, if you’re a light user—less than 40 minutes per week—shop around for an inexpensive pay-as-you-go (PAYG) phone. Second, if you’re a moderate user—between 40 and 70 or so minutes per week—cut your usage enough so that PAYG makes sense. Third, if you’re a heavy cell phone user—more than 70 minutes weekly—choose from a smorgasbord of tactics, none of which force you to cut down on any yakking.
27.1 Choose a PAYG Phone
PAYG offers many advantages. You avoid credit checks, contracts, monthly bills, and most of the phone company “gotchas” (late payment fees, overage charges, and termination penalties). Some plans even provide advanced features like call forwarding and internet access. Best of all, rates are low. Under the best deals, if you pay $100 in advance, your phone loads up with 1,000 minutes that don’t expire for a full year, which saves you $776 off the average subscription price.
Visit online review sites. ConsumerSearch.com recommends several reliable PAYG services based upon your expected level of use. PrepaidReviews.com provides star ratings of more than 25 PAYG providers. MyRatePlan.com takes a similar approach. As you shop, look at these issues.
- Activation Fees. Some companies charge fees to activate phones for the first time. Ask for waivers or choose carriers that don’t impose the charges.
- Daily Access Fees. Under some PAYG plans, you pay a lower per minute charge, but on any given day that you use the phone, you pay a $1-$3 access fee. If you don’t use the phone very often, then this fee structure might make sense. Otherwise, pick a plan that charges more per minute, but doesn’t charge you separately for access.
- Refill Expirations. Under most PAYG plans, the fewer minutes you buy, the sooner they expire. If you spend $100 upfront, however, your minutes last a full year, and any unused time rolls over if you recharge with another $100 within twelve months.
- Roaming Charges. Any cell phone has a designated home territory — a metro area, state, or, under the best plans, the entire country. When you’re outside of the designated area and make a call, you’re “roaming.” Some PAYG plans charge extra for these calls and others don’t.
- Nationwide Long Distance. If you make frequent calls to numbers outside your home area code, favor plans with FREE nationwide calling.
- International Calls. If you expect to travel abroad, including Canada and Mexico, know whether the phone works there and what calls cost.
- Coverage. Before buying, check the carrier’s call quality at the places you spend the most time. When friends visit your home, have them make calls to test the signal strength of their carriers. And be sure to visit DeadCellZones.com and CellReception.com, where you can type in any address and receive reports of various carriers’ reception quality at that precise location.
- Handset Features. Choose from among cameras, Bluetooth, keyboards, speakerphone, touch screens, etc.
27.2 Reduce Cell Phone Use and Choose PAYG
If you’re a moderate cell phone user, a PAYG plan lies within reach, but to get there, you have to slash minutes. Consider these tactics.
□ 27.2.1 Rethink Your Cell’s Social Life
Your cell’s greatest advantage is its mobility—it lets you schedule meetings on the fly, locate friends in a crowd, and solve all kinds of minor hassles. When it comes to social calls, however, your cell offers no advantages over less expensive options such as face-to-face conversations and landlines. Limit your cell phone’s socializing.
□ 27.2.2 Use Other Phones
During the day, you’re near phones other than your cell: landlines, VoIP lines, or the cells of family members. Use these alternatives whenever you can.
□ 27.2.3 Time Yourself
On outbound calls, if the conversation can wait until you can reach a cheaper phone, talk later. On incoming calls, keep conversations short or ask if you can call back at another time on a different line.
□ 27.2.4 Retrieve Voice Mails on Landlines
The minutes you save will end up saving you.
□ 27.2.5 Turn Cells Off
A phone doesn’t have to be on 24/7. The more it’s off, the fewer minutes you use.
□ 27.2.6 Use Email
Whenever practical, write instead of call.
27.3 Pay a Monthly Bill but Limit Costs
If you’re a heavy user, a monthly plan delivers value. With these tactics, you enjoy reasonable bills that don’t leave you speechless.
□ 27.3.1 Ditch the Landline
If you rely on your cell phone this much, you probably can ditch the landline (see 26.1). Don’t pay for redundant services.
□ 27.3.2 Shop Around
With 321 million cell subscriptions, the US market is saturated. Price wars are near. Research the latest deals at PhoneDog.com, CNET.com, ConsumerSearch.com, and MyRatePlan.com. Or visit BillShrink.com, which reviews your recent call records and suggests cheaper plans based on your actual usage.
□ 27.3.3 Try Before You Buy
Many carriers offer one-month trials during which you can cancel contracts without penalty.
□ 27.3.4 Hire a No-Contract Carrier
At StraightTalk.com, for example, you get unlimited talk, data, and text for about $45 monthly—half the price of a typical smart phone.
□ 27.3.5 Shop at Warehouse Clubs
If you’re a member, don’t sign any new cell contract until you first review the latest warehouse offers.
□ 27.3.6 Bundle
Some carriers include a cell phone option in their bundled offers.
□ 27.3.7 Avoid Extras
Smart phones are expensive. Opt for less trendy handsets that offer great features at lower prices.
□ 27.3.8 Talk When Talk Is Cheap
If you chat on evenings and weekends, seek plans that offer discounts for calls at those times.
□ 27.3.9 Text Sparingly
Texting is convenient, but costly. Leave this form of communication to teenagers and the very wealthy.
□ 27.3.10 Download a Text App
If text you must, limit your costs with an app such as TextPlus.com.
□ 27.3.11 Use the Internet at Home
Unless you have Wi-Fi at home, surfing via cell costs more. Ride the surf where the surf is cheap, dude.
□ 27.3.12 Call FREE 411
Call 1-800-FREE-411 and get FREE directory assistance if you listen to a short commercial (about 12 seconds).
□ 27.3.13 Follow Family Planning
If your household consumes minutes by the truckload, shop at carriers that offer low-cost family plans.
□ 27.3.14 Follow Tax Planning
If you use your cell phone for business purposes, you may be able to pay for part of the monthly bill with pre-tax dollars. The rules are complicated, so consult your tax advisor.