The phone companies’ recent pledge to warn consumers when they’re about to exceed their usage plans and rack up big bills should serve as a wake-up call to consumers.
“It’s great that these companies want to help, but consumers should take matters into their own hands when it comes to their cell phone bills. They might be surprised at how they can save,” says Angie Hicks, founder of Angie’s List, the nation’s premier provider of consumer reviews.
Under pressure from the federal government, some cell phone companies pledged this week to warn customers before they go over their monthly limits to help protect them from fees charged for exceeding minutes, texts, data use or racking up roaming charges.
Rather than use this alarm system, Hicks says consumers are better off taking a good look at their telephone habits, shopping around for the best plan and negotiating to get it at the right price.
“If you’ve never gone over your plan, you might be paying too much. If you routinely exceed your plan, you may not have the right package for your needs,” Hicks says.
The best tool for getting the most value for your cell phone dollars is a solid understanding of your communication needs and how they fit into the terms of your calling plan. Consumers may have a good idea of what their contract involves when they first sign it, but the documents are lengthy and it’s easy to forget the details. Often, consumers don’t evaluate their plans until they get hit with big bills.
Cell phone companies have ranked as one of the top-10 worst grade earners for the past three years on Angie’s List. Most complaints involved high bills or poor customer service.
“Competition in the phone industry is fierce, and that’s great for consumers,” Hicks says. “But you can’t win this contest without a little effort, and most of that needs to occur before you dial.”
Before you dial:
1. Track your current usage. Dig out your old bills for the past few months and review what you’ve been doing with your cell phone. If you’re consistently exceeding or under-using your plan, you need a new one. If you’re using a majority of your minutes calling a few select numbers, you may save with a friends and family or in-network type of plan.
2. Determine what you need. Are you paying for services you never use? Save by eliminating “extras” like special ringtones, text messaging fees, Internet, roadside assistance, even your landline phone if you never use it.
3. Consider cutting insurance. If you’re paying for insurance, determine its cost, coverage period, length of your manufacturer’s warranty and deductible costs. Don’t pay more for insurance than the actual replacement cost.
4. Consider bundled services. Combining phone, Internet and cable/satellite services to one provider can result in discounted fees by the provider and more savings.
5. Consider prepaid. If you’re not a high-volume phone user, you may be better off with a prepaid phone. You will avoid overage charges, won’t be locked into a long-term contract and will pay for only the minutes you use.
Once you’re ready to dial:
1. Skip customer service. Ask for the customer retention desk rather than customer service. Often companies have deals to keep current customers that may be better than deals to get new customers.
2. Prepare to bargain. Gather your company’s latest promotional offers along with its competitors so you have a good working knowledge of what’s available to you. Know your needs and ask for a plan that will accommodate you rather than accepting a cookie cutter plan the company has devised.
3. Be OK with a breakup. Be prepared to end your service if you can’t get a better deal, but be sure it’s worth it to pay any early termination fees before you do so.
4. Understand your contract. Read the fine print before you sign any contract. Look for hidden charges, including text messaging, activation and upgrade fees or insurance. Know when your contract ends and penalty for early termination.
5. Know who you dealt with. Don’t forget to get and record the name of the person you’re speaking with and note the date and time you called. These details will help if you need to follow up later.
After you have a new plan:
1. Watch yourself. Each time you dial 411, you’re being charged a premium fee, so use free options like the Internet, a free directory assistance service (there are multiple available) -- or dig out that phone book you’re currently using as a table leg. Remember, you are charged for the minutes you use when calling a toll-free number from your cell phone. If you need to debate a charge with your credit card company, do it from a landline or during off-peak hours so you’re not wasting valuable minutes on hold.
2. Beware of over-texting. We’ve heard horror stories from parents who purchased a cell phone for their child only to get a bill the next month for hundreds of extra dollars because their child sent 4,000 text messages. If you plan to text a lot, sign up for an unlimited texting plan. Individual text charges add up quickly. If you don’t use text messaging, make sure you’re not paying for it.
3. Review your bill. Sure you bargained to get the best deal, but keep an eye on your usage and charges to be sure you’re still on a plan that fits your life and that there are no mistakes in the bill.
4. Keep on track. Set time aside to review your phone usage a month or so before renewal time and be sure you next contract is as good or better as this one.
Angie’s List collects consumer reviews on local contractors and doctors in more than 550 service categories. Currently, more than 2 million consumers across the U.S. and Canada rely on Angie’s List to help them make the best hiring decisions.