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Put the Brakes on Runaway Cell Phone Bills

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A few years ago, cell phones were luxuries for adults. Now they are must-haves for most people, including kids. Further, escalating costs are about to choke the typical family. A recent story in the New York Post reported that 11 federal, state and city levies add as much as 33 percent to the costs of New Yorkers' cell phones. If over-chatting and texting don't get you, rising taxes will.

If cell phone bills are leaving you begging for mercy, you may have an out. Prepaid cell phone service is like a prepaid phone card. You buy the cell phone (some companies are giving people free phones to get started), activate it and pay to put minutes, or "units," on your account. As you use the phone, minutes come off your account. When you run low, you pay to add more minutes.

The best things about prepaid cell phone plans are all the noes:

—No contracts to sign.

—No monthly bills.

—No long-term commitments.

—No credit checks.

—No age limits.

—No hidden fees.

You should consider a few issues when going with prepaid cell phones:

Prepaid wireless makes sense for seniors, teens, kids and others who are not heavy users or active talkers. However, if you fall into the active-talker category, prepaid can be an expensive way to go. Even though prepaid customers spend less on average per month than their friends on typical cell phone plans do, they pay more per minute.

Pricing varies from one provider to the next and according to how many minutes you buy at a time, costing, on average, between 10 cents and 50 cents a minute.

Ditto for text messaging. Minutes usually expire after 90 days.

TracFone Wireless, the largest mobile phone provider, doesn't actually own any cell phone towers. It leases coverage from the local cellular providers. That means its phones work anywhere that cell phone service is available. You can purchase pay-as-you-go phones from TracFone Wireless at Target, Sam's Club, Rite Aid, Amazon, Lowe's, Walgreens and other retailers. Go to http://www.TracFone.com for current offers and more detailed information.

Virgin Mobile offers an interesting prepaid cell phone plan; its minutes do not expire. However, the service may be spotty in rural areas. Read the details of Virgin's prepaid plan at http://www.VirginMobileUSA.com.

Stop into any 7-Eleven convenience market and you'll see spinner racks with prepaid phones from providers such as T-Mobile, AT&T and Virgin Mobile.

Should you dump your current plan in favor of a pay-as-you-go model? That depends on your needs. If you have spotty credit, prepaid is something you may want to consider. If you are trying desperately to slash your current monthly bills, prepaid is a way to put yourself under strict discipline without giving up mobile calling altogether.

All things considered, if you can keep to the terms of a contract without going over your allotted time and you do not rack up roaming charges, commitment still may be cheaper than pay as you go.

Mary Hunt is the founder of www.DebtProofLiving.com and author of 18 books, including her latest, "Can I Pay My Credit Card Bill With a Credit Card?" You can e-mail her at mary@everydaycheapskate.com, or write to Everyday Cheapskate, P.O. Box 2135, Paramount, CA 90723. To find out more about Mary Hunt and read her past columns, please visit the Creators Syndicate Web page at www.creators.com.

COPYRIGHT 2009 CREATORS SYNDICATE INC.


Comments

2 Comments | Post Comment
Mary, nice article. The main thing I would mention to anyone considering switching to pre-paid cell phones is that you should figure out first whether you can reduce your current cell bills down to acceptable levels--thereby saving often significant plan cancellation fees (AKA "early termination fees"), not to mention the convenience of keeping your present cell phone number. In this vein, I thought that I'd elaborate on a method for effectively reducing cellular expenses. Not to blatantly plug, but I work for the consumer advocacy website http://www.fixmycellbill.com, powered by a company called Validas, where we slash the average cell bill by 22 percent. It costs five bucks to implement our suggested changes to your plan (the average consumer currently saves around $450 annually through us) but we will analyze your bill for free without any commitment of purchase, just to let you know exactly how many dollars your carrier is ripping you off by. I could go on and on about how shifty these cell companies can be in their attempts to make you overpay. We stop them, and have currently put over $5,000,000 back in the pockets of consumers. You can check out Validas's fixmycellbill.com in the national news media, most recently on Good Morning America at http://www.abcnews.go.com/GMA/story?id=6887412&page=1.

Good luck to everyone reading on making an informed wireless choice.

Dylan
Comment: #1
Posted by: Dylan
Tue May 5, 2009 2:28 AM
Hey, I just love the NET10 service you mentioned in the article. I have been using it for about 8months now and am so impressed with their service. The cheap rates are reason enough to switch to them. I mean, I save about $30 a month compared to the Verizon contract I was on previously. But the best advantages is the flexibility you mentioned as well. I can spend as little as $15 a month or as much as I need to and never pay more than 10c a minute. No overage charges, no unused minutes (which actually costs money) and convenient, easy recharge whenever I want.
Comment: #2
Posted by: ZaneS
Tue May 5, 2009 6:16 AM
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