Bill Skills: Saving on your cell phone bill

Bill Skills: Saving on your cell phone bill

WILMINGTON, NC (WECT) - Unless you are lucky enough to have a phone that is paid for by your employer, most consumers get a monthly cell phone bill. Smart phones have gotten increasingly expensive, and monthly cellular and data plans can take a significant bite out of your budget.

The bills and various fees can be confusing to some consumers and it can be hard to catch an error if you don't understand the charges to begin with. WECT is breaking down the bill, helping you understand what you're paying for and how to avoid paying too much.

Selecting a Plan

One of the biggest variables for cellular customers is their data plan and whether to opt for an unlimited data plan or a plan with a data cap. Unless you are a brand new cell phone user, you've hopefully had some time to develop a track record. You can use your billing history to see how many minutes and how much data you actually use and select the most cost-effective plan.

The unlimited plans are typically a bit pricier but can save you a lot compared to paying for overages on a plan with caps on minutes and data.

For example, an unlimited talk, text, and data plan for a single person on Verizon is advertised at $75/month at the time of this publication. You can get a plan for talk and text, with 500 MB of data for just $30 a month with Verizon, but it will cost you $5 per 500 MB you go over on data.

You can also achieve significant savings if you and other family members team up on the same plan. That same unlimited plan advertised at $75/month at Verizon drops down to $40/month per person if 4 people from your family sign up with their phones.

Fees

There are a number of fees most cell phone companies charge, such as the Universal Service Fund Fee. The federal government requires that carriers pay them a percentage of their revenue to help expand access to rural and low-income areas, and this fee helps cover that cost. A Regulatory Charge helps companies cover the cost of complying with federal regulations, and the Administrative Charge on many cellular bills helps carriers maintain their networks.

Most of these fees are fairly standard within the industry and there's not much you can do to avoid them. But T-Mobile now offers the T-Mobile One Plan, an unlimited plan where all of those fees are included in the advertised monthly rate of $70 for a single user. It helps people avoid sticker shock from all those additional fees, which are not advertised as clearly by most carriers and can quickly add up.

Many companies also offer discounts of up to $10 a month if you sign up for autopay and paperless billing.

Switching Networks

It's much easier than it used to be to switch networks. Most companies no longer require you to sign a two-year contract. But on the flip side, the upfront cost for a cell phone has gotten considerably more expensive.

Cellular companies used to be able to offer you a new phone for around $250, or even for free if you signed a 2-year-contract. They could count on recouping some of the cost of the phone over the life of your contract, and it's a big reason why customers sometimes had to pay hundreds of dollars to end a contract early. With no contracts, there is no longer a termination fee for switching providers, but the companies now have to get paid for their phones on the front end.

You can typically finance the cost of a $1,000 iPhone, for example, over a 24-month period for no extra cost, but you'll lose some of the flexibility to walk away from that cellular provider. The carrier can try to collect immediately for any remaining balance owed on your phone if you switch providers, and they may also charge a penalty if you financed your phone.

If you find a better deal with another provider, it's worth talking to your current carrier before you switch, as they may offer you an incentive to stay. But as the industry moves away from long-term contracts, it's easier for customers to shop around.

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