Home > Personal Finance > 4 Steps to Cut Your Cellphone Bill in Half

Comments 0 Comments

We pay a lot for our cellphone obsession. According to the market research company JD Power, the average American cellphone bill is $70 for a single user and $155 for a family. Most surveys, including one Nielsen released last month, conclude that about two-thirds of Americans own smartphones.

But we can save money and still enjoy our technology. How would you like to cut that bill significantly — let’s say, by 50% — so you can use that cash elsewhere?

Here’s the step-by-step plan to hold the line on smartphone bills.

Step 1: Ditch the Contract

The problem with cellphone contracts is that you are locked into a plan that forces you to make higher monthly payments for years. Skip the contract, and you can save hundreds.

An article in Time compared four ways to get a premium phone, along with cell service: Payment plans, two-year contracts, pay-as-you-go plans and month-to-month plans. The cheapest? You guessed it — month to month.

In addition to cost, the problems with contracts include a lack of flexibility, potential termination fees and tons of fine print. Let’s face it: These things used to be the only game in town, but now they’re the worst game in town.

Step 2: Find the Right Plan

Out of that contract? Time to go shopping. But before you do that, do this: See how many calls you make, how many texts you typically send and how much data you typically use. The easiest way to do this is to pull out your bills for the past few months and review them.

There also are several online calculators that can help you assess your usage. One useful tool is on the website WhistleOut, which allows you to compare plans and phone prices. You enter the number of lines, type of phone, and how you expect to use each one. WhistleOut then connects you with plans to choose from.

There are pay-as-you-go plans that work for disciplined, data-driven, responsible and self-restrained individuals: You only pay for the exact amount of data, texts and minutes you use.

To take advantage of most of these plans, you have to buy a phone — no payment plan. In addition, pay-as-you-go plans add up quickly if you don’t monitor usage — or if you are not quite as self-disciplined as you think you are.

Then there are the month-to-month plans, most of which require you either to buy their phone or, if you already own a smartphone, to buy their SIM card.

Finally, before you sign up with any company, make sure they offer good coverage in your area by looking at a coverage map; and check reviews and complaints before you sign up.

Step 3: Buy a Cheaper Phone

Whether it’s the prestige, brand loyalty, or the need for the newest gadget, many people can’t wait to answer the call when Apple — or one of its few high-end foes — comes out with a new phone.

But think about it: The latest Apple smartphone could cost you up to $700. Even if you are addicted to Apple, do you really need the latest version?

You can drop an Apple or similar high-priced phone altogether. Consumers who stick to these brands get a lot of the extras you won’t find on cheaper phones. However, there are many manufacturers producing alternatives that cost a fraction of the price.

For example: Stacy  Johnson carries a Windows phone, which can cost as little as $50, without a contract, depending on the carrier. It doesn’t have all the apps and gadgets that are available on a fully equipped, ultra-hip iPhone or noted facsimiles, but he figures it has 80% of them, at about 10% of the price.

Step 4: Limit your Data Usage

When you’re using your phone, use Wi-Fi to surf the Web whenever possible, rather than using cellular data, which is much more costly. (Use the settings on your phone to attach it to every Wi-Fi network you are familiar with.) Think of cellular data as a convenient backup when you are out of range of those networks.

Depending on your habits — and those of other family members — you may find you can save money by cutting back on some of the behaviors that gobble it up, according to Consumer Reports, for instance:

  1. Watching video streams: An HD-quality video stream can consume up to 5MB or 6MB per minute. Thus, one four-minute video a day from YouTube would use 700MB of data monthly.
  2. Making video calls: You can use as much as 3MB per minute.
  3. Streaming music: This can burn through 1MB a minute. You do the math!
  4. Uploading video: If you must do this on your phone, shoot for a lower resolution. Uploading a three-minute HD resolution video can use 300MB.
  5. Playing fast-action games: Playing these competitive games with your friends on your phone can cost you 1MB of data per minute.

This post originally appeared on Money Talks News.

More From Money Talks News:

Image:  iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team