Tuesday, September 1, 2009

Shopping Your Cell Plan

A friend of mine made a very good suggestion, that I wished I followed more often. "Every year." he says, "you should shop your cell plan."

This does not mean, necessarily, that you should switch providers, but that you should check to see what bargains are out there.

Cell phones do not have to provide regulated rates like land lines. And the competition among carriers is now fierce. So you can get good bargains by shopping around. Every year, check out competitive prices and plans from different carriers.

And then call your present carrier as ask them to meet or beat it.

I just got off the phone with my cell carrier and they sliced $30 off the plan. I am going to fewer minutes, but when I look at my bill, it is clear I am using fewer minutes than my plan provides. I had over 2800 rollover minutes on my plan, which is nearly enough for four months of service for me.

Not only did they agree to lower my plan rate, they threw in another 2,000 rollover minutes. So even if I end up going over my plan rate, I can probably go for a year or more before I use up these rollover minutes.

So for a 15 minute phone call, I saved nearly $400 a year in cell phone costs. I also took international calling off one phone ($3.95 a month) as we tend to use only one phone for overseas calls. It may not seem like a lot, but it works out to about $50 a year. Every little bit helps.

Initially, we have a very expensive plan with a lot of minutes (1500 a month) as my partner was in Real Estate, which involves a lot of phone calls. But over the years, our usage has dropped to 1000, then 900, then 750, and now averaging 500 or less. There is no sense paying for excess time you are not using.

Another interesting thing has happened as well. We use the phone less than we used to. More and more, people are sending e-mails, particularly if they know you respond to e-mails. E-mails can be responded to on your time, provide a concise written record of what was said, and do not interrupt your day.

In fact, most customers, before they call me, actually e-mail first and say "do you mind if I call you?"

So phone usage in general is dropping off - at least for many people.

For the poor and unsophisticated, however, having a cell phone glued to the ear is de rigeur. It sort of is like smoking - a dirty habit practiced only by the lower classes. You can always spot the serial cell phone user, as they do rude things like take calls in the middle of a conversation with you, or in a restaurant, or in the middle of dinner. It is soooo trashy. If you see someone smoking and on a cell phone, well you can bet they live in a trailer - and not a nice one, either!

And kids, of course, have to have the latest cell phones or texting gadgets, lest they be viewed as "lamers" to their pals. But the same friend who advised me to shop my plan also has a very good hold on kids and cell phones. He uses his son's cell phone as an exercise in learning self-control and responsibility.

Today, there are no pay phones and land lines are even hard to come by. Giving a child a cell phone is a practical solution, not a wild luxury. It is also an opportunity to teach a child responsibility - when are where to use a cell phone, texting and the like, and also limits on minutes used, etc. Since most plans have unlimited minutes between family members (or indeed even between people on the same system) family members can call each other (or message) all they want, at little additional cost.

But beware. Make sure you either disable texting on your phones, or sign up for a plan. You may have read some of the news stories about youngsters texting with a new phone, not realizing that each message costs 50 cents or a dollar, if a plan is not in place ahead of time, only to later end up with a $5000 phone bill.

It is a tough choice for a parent, and I'm glad I don't have to make it. Cell phones and in particular texting, can be very distracting for a child. Texting is akin to passing notes in class, and oftentimes children are texting when they should be paying attention - in class or behind the wheel. But not providing these services with your child's phone (or heaven forbid, not providing them with a phone at all!) could cause them to be ostracized. Again, it is all about teaching limits.

The disposable cell phone is an interesting alternative. But I am not sure it is a worthwhile item, except under certain circumstances. Most cost only a few dollars, and you can buy "minutes" with phone cards. However, if you do not use these minutes, they expire at the end of the monthly or after a certain period. If you do any calling at all, you can expect to use up $25 or more in minutes every month. A regular cell plan could be had for the same amount, albeit not with a lot of minutes on it.

Some have opined that such phones are useful for travellers. For example, if you are travelling to a foreign country, you can pick up a "disposable" cell phone at the airport or any retail store, use it for a week or so, and then toss it. It could be cheaper than trying to enable your domestic phone overseas. Or perhaps not. My present carrier (AT&T) can enable my phone overseas for only a nominal fee. Minutes are pricey, but then again, people at least have my number to dial.

One way to certainly save money is to dump your landline. For young people, this is not even an issue. They go away to college with cell phones, and never get around to installing a land line. They tend to view a land line as an unnecessary and expensive nuisance. Older people have yet to figure this out, relying on both landlines and cell lines, not realizing that the $50 a month they spend on a landline and long distance could pay for 500 minutes (or more) of cell time, including long distance.

Unfortunately, in some locations, the only high speed internet available is DSL, and this requires a landline to be used. However, you can opt for a local landline (no long distance) and then simply not use the landline, or have your cell calls forwarded to the land line (minutes may apply) or use a calling card for the occasional long distance call on the land line.

The main thing to bear in mind is that these are all subscription services and you don't want to succumb to subscription fatigue. What may seem like a trivial expense ("It's only $99 a month!") adds up to a large cash figure over time (thousands of dollars). Throw in all the other subscription services you have (cable, satellite radio, internet service, etc.) and they start to rival a car payment. Thus, it pays to trim subscription services down to the minimum where possible, and keep an eye on them, lest you find out 20 years later than you've squandered thousands on services you never used.

Note that the opposite is also possible. I reduced my cell plan because I had nearly a half year's worth of rollover minutes accumulating. But if you are at or near the limit of your plan and have no rollover minutes, don't make the "dieter's mistake*" and reduce your plan, only to be socked later on with overage charges. While it may be a nice fantasy, it is like a leased car with mileage limits. You cannot simply talk less, in many situations, just as you cannot simply drive less.

My friend's advice was right - shop that plan. I put this off for several months, because I was loathe to call the company and be put on hold and have to deal with the people there. Also, I was loathe to shop the different companies and compare rates, etc,. nor did I want to switch phone numbers.

Eventually, I probably will switch providers, if one can give me a better rate, even if it means switching phone numbers (I have moved to a new area code since I got my phone nearly a decade ago). But until then, it never hurts to shop that plan!

Note that when switching providers, see if you can keep your old phones. Many new plans come with a "free" phone or a phone at a reduced cost. As in my article TANSTAAFL! these "free" phones are hardly free, and in fact the cost is rolled into the monthly service fees. If you can re-use a functional older phone, you may be able to negotiate a discount.

And by the way, the fancier and more expensive phone are usually not worth it, if all you plan on doing is talking on the phone once in a while. We paid extra for a fancy phone, only to discover it was pre-programmed with a menu of pay options (ring tones, texting, etc.) that it steered you to every time you turned it on.

Cell phone insurance is another ripoff. For a couple of dollars a month, they offer to replace your phone if it is damaged or lost. In many cases, these plans only provide you with a "compatible" phone which may be rebuilt, or used. And in most cases, the cost of a new phone is only a couple of hundred dollars at most. If you are careful with your phone, chances are, the "insurance" is a ripoff over time.

We use one cell phone as a land line - tying it into the house wires with a docking station ($89 at most phone stores or online) and using a cell antenna and amplifier to improve signal ($99 online). This way, we can move our "house phone" from place to place, without having to change phone numbers. And it is so much easier talking on a regular phone than on a tiny cell unit (one of my house phones is a 1950's dial phone - tied into my cell phone via the docking station).

The other phone we take while traveling, but rarely use. Again, chatting on the cell phone seems to be a pastime of the poor and uneducated. Most of what transpires over these conversations is trivia and nonsense. Many times we forget to take our cell phone and rarely miss it. It is nice for emergencies and all, but I have no compelling reason to be talking on the phone all the time with people. I guess I'm weird, but if you think about it, that's how we all used to be, before they invented cell phones.

I am not a cell phone guru, so I am sure there are probably other areas where you can save a bundle on your cell plan. If you know of any, I am all ears.

* dieter's mistake - buying clothes a size too small on the premise that "I'll fit into it when I lose weight" and end up selling them in a yard sale for a dollar. The same phenomenon is true with people leasing cars. They see the 10,000 mile per year mileage limit and just think to themselves, "oh well, I'll just drive less," not realizing that their daily commute pretty much dictates the miles they drive.

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