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Slashing Cell Phone Bills in Tough Times Provided by Telecommunications Research & Action Center  |
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As the economy worsens and Americans feel growing pressure to cut family budgets, the good news is that millions of U.S. consumers could slash up to half of their monthly cell phone bills by taking a few simple cost-saving steps. The most dramatic savings are likely to come from switching to prepaid services and reducing the total number of cell phones in a family, according to Sam Simon, founder and chairman of the nonprofit Telecommunications Research & Action Center (TRAC).
Simon said: "There are a lot of ways to save on your cell phone -- and regular phone -- bills. Many consumers today are facing desperate times and are looking for ways to make big cuts in their budgets. Even so, some people think of themselves as so dependent on their cell services that they are more likely to scrimp on food than they are to curb their cell phone spending."
It's true. Forbes.com is reporting that cell phone customers are responding to the current economic downturn by dining out less frequently (88 percent), holding off on major purchases such as cars, electronic and furniture (79 percent), driving less (57 percent) and even buying fewer groceries (41 percent). But less than a third (32 percent) are cutting back on their cell phone spending in response to tough times.
Simon said that makes no sense at all when you can respond to the current economic downturn by getting essentially the same cell phone service for significantly less money.
THE PENNY PINCHER'S GUIDE TO SLASHING CELL PHONE BILLS
Here are five tips from Telecommunications Research & Action Center (listed in order of the largest to smallest possible savings):
1. Get rid of expensive cell phone fees by switching all or some of your
cell phones to prepaid cell service. The average "postpaid"
(contract-based) cell phone user pays about $50 a month to be locked into a long-term contract and also faces the risk of steep overage charges of up to 45 cents a minute and painful early-cancellation fees that can cost $150-$200. If possible without incurring a penalty, switch to a prepaid service where you buy a phone for as little as $15 and pay only for the minutes you use, without any contract or cancellation fee. While prepaid cell phones are not for the most intensive wireless users, they are well suited for the millions of typical cell phones users talking 200 minutes or less a month. If you have more than once cell phone in the family, you can experiment by substituting a pre-paid cell phone for at least one post-paid cell phone.
How many consumers might save in this way? According to 2008 data from the Cellular Telephone Industry Association (CTIA), there are 262 million cell phone subscribers in the United States. Of that group, only 16.9 percent are prepaid cell phone users. The fewer than one in five Americans using this lower-cost option is considerably under the 37-89 percent of the cell-phone market that prepaid services account for in other countries, including most developed nations, according to the CTIA.
2. Determine if you are a good candidate for "cutting the cord." One way to really slash your overall telecommunications spending is to dump your old-fashioned landline phone in favor only using a cell phone. And then
switch to a pre-paid phone for your wireless service. It's not for
everyone, but 16 percent of Americans already have made this leap into "wireless only" cell phone service, according to CTIA data. This is a good option for people who make relatively few calls and do not have children at home. It is a great way to save a lot of money if you or your family is in financial crisis: You might be spending a combined $100 or more on landline and contract-based cell phone services and could replace that with $10 a month in carefully used pre-paid cell phone minutes.
3. Get on the right plan and be smart about using your minutes. Give up on frills, reduce your total minutes and move down to a more basic rate plan. This might mean putting a block on texting from phones, limiting use and putting your kids on a budget. Be creative in managing the minutes and features between your land line and your cell service. For example, if your land line has unlimited long distance you might consider using it more and reducing your minutes on your cell plan. Or vice versa, going to a more basic landline plan and doing your long distance calling on your wireless plan. Consider switching to a lower-cost cell phone plan, and then shifting your calling to night and week-end times that don't burn plan minutes.
4. When it comes to cell phones, don't buy a Ferrari when all you need is
Honda Civic. An independent study by Nielsen Mobile suggests that fewer
than one in five cell phone users (18 percent) have downloaded ringtones so far this year. Only about one in 10 (11 percent) downloaded software. That means many consumers are paying to use a phone that is more feature-intensive than they actually need. Keep in mind that most cell phones with all those extra bells and whistles involve either higher monthly base bills or add-on fees that can send your cell phone bill needlessly soaring well over $50-$60 a month. Don't waste money on a cell phone that can do more than you will ever want or need it to do!
5. Don't let other people "steal" your minutes. Most telemarketing calls are made today to traditional landline phones. However, as more and more people cut the cord (or even just start supplying cell phone numbers to store clerks and in filling out online forms), junk cell phone calls will rise. Make sure to sign up all of your phone numbers - including your cell
-- for the Do Not Call list at http://www.donotcall.gov/ or call
1-888-382-1222 from the phone number you wish to register.
For more consumer tips, visit TRAC at http://www.trac.org/consumer/.
ABOUT TRAC
The Telecommunications Research & Action Center
(http://www.trac.org/consumer/) is a non-profit education and advocacy organization for residential and small business communications consumers.
For 25 years, TRAC has provided consumers with important tips on stretching their communications dollar further and avoiding expensive pitfalls. TRAC produces consumer guides, comparison charts, brochures, and online content dedicated to helping consumers navigate the often complex world of communications devices and services. A free bi-monthly e-newsletter, TRACNotes, reaches more than 5,000 readers, providing them with invaluable information on the latest developments in the communications marketplace that affect consumers. TRAC is based in Washington, DC.
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