5 Ways Wireless Carriers Gouge You–And How to Fight Back
By Yardena Arar
Are you paying too much for your cell phone and its services? Even if you’re sticking to your monthly allocation of minutes and messages, you might still be paying more than you have to.
The only way to tell is to take a cold, hard look at your plan and your handset–and at the way you actually use them. Here are five ways your carrier might be milking you for extra bucks–and what you can do to stop those unwanted charges.
Texting Fees: I have never understood why these are broken out from your data plan, but that’s the reality. Texting fees are good candidates for a self-audit, though, since some carriers have been raising them. Two obvious possible overcharging scenarios: Either you’re not using anything close to the number of messages allowed by your plan, or you’re being hit for overage charges because you underestimated how often you’d use text messaging.
Both are annoying, but you can avoid paying extra if you reassess how much you’re really using text messages–and how you’re using them. If you’re sending a lot of one-word messages (such as “OK” or “Yep”), you’re building up your monthly message count with a lot of empty air. Try to send fewer messages–ones that actually say something–and you might find that you really don’t need an unlimited plan (I’ve yet to break the 200-per-month limit on my $5 SMS messaging plan).
On the other hand, if text messaging is the communications medium of choice in your circle, or you’re hooked on using SMS for TV show or concert promotions, perhaps it’s time to move up to a plan with unlimited texting. While you’re at it, take a hard look at your voice plan–if you’re doing all that texting, maybe you don’t need so many voice minutes.
The Two-Year Contract: iPhone lovers can skip this section (since you can’t get an iPhone without signing a two-year contract). But the rest of you should consider how much value you’re getting on a new phone when you sign that deal with the wireless telco devil–a two-year commitment in exchange for a couple hundred dollars’ worth of savings on the handset of your dreams. First of all, are you even sure you’re going to want that handset at the end of one year–much less two? If you’re a gadget-lover who drools over every new hottie handset that comes the pike, two years will feel like an eternity. And in the meantime, you’ll be stuck with a carrier that may not provide adequate service where you live.
Solution: Either opt for a shorter contract (shop for one that offers prorated handset subsidies) or avoid a contract completely and pay top dollar for an unlocked handset (see Staff Editor Ginny Mies’ guide to unlocked phones from last spring). If being free of a contract suits you, you might want to check out some of the prepaid services, which are starting to offer some very slick handsets. If you do go with a prepaid service, check out its area of coverage first. You don’t want to learn after the fact that your prepaid carrier doesn’t service your area, which then locks you into roaming charges from the get-go. (Harry McCracken looked into the gotchas of prepaid plans earlier this year.)
If you’re trying to get out of an existing contract, note that carriers no longer charge the full early-termination fee across the board. Most will prorate that fee based on how long you stuck with the company. Make sure to find out about a carrier’s early-departure policy before you sign up for a contract.
Overseas Calling Charges: AT&T and T-Mobile handsets can accompany you to Europe and to other countries that support GSM/GPRS smartphones. But if you don’t plan ahead, you’re likely to be blindsided by a seriously huge bill for roaming charges.
AT&T customers can bring down rates for voice calls by paying $6 a month for AT&T World Traveler Service. Voice calls overseas vary in price, but AT&T, for example, normally charges $1.29 per minute for calls to and from France; its World Traveler subscribers pay 99 cents a minute.
One tip to keep voice roaming charges down: If you’re not able to pick up calls when traveling (such as when you’re asleep), power down your handset, or at least put it into airplane mode so that it doesn’t show up on a carrier network. Once an incoming call hits the overseas network in pursuit of your handset, you’ll be charged at overseas rates even if the caller just winds up leaving voicemail. In fact, you might even incur a double charge–when the unanswered call bounces back to voicemail in the United States, the overseas carrier may charge for sending the call back. But if the network can’t find your phone, the call will go straight to voicemail, incurring no foreign roaming charges.
Making calls using Skype or another voice-over-IP service can save you money if you can find a Wi-Fi network (which is generally a good strategy to save money on data services while traveling).
Overseas Data Charges: Unlimited data plans from U.S. carriers don’t apply to data services on overseas networks: AT&T’s basic charge for international data roaming is 1.95 cents per kilobyte of data sent or received. That’s (almost) a whopping $20 per megabyte–and a single digital image can easily cost that much to e-mail.
Fortunately, AT&T offers international data roaming packages that, while still expensive, significantly undercut the pay-as-you-go rate. Consider buying one before you leave if you plan to use your iPhone, BlackBerry, or other smartphone for e-mail and Web browsing. The packages range in price from $25 for 20MB to $200 for 200MB–and even if you exceed your allotment, the overage rate of half a cent per kilobyte is still cheaper than the usual rate of 1.95 cents.
iPhone users who want to keep an eye on data usage while roaming should go to Settings/General/Usage and look under Cellular Network Data. Do this when you first arrive at your overseas destination, and you can reset all the statistics to start tracking your use from then on. (Better yet, try it out before you go to get an idea of what your typical monthly data consumption looks like.)
Also bear in mind that you don’t have to incur roaming charges if you simply leave your handset at home. (Sprint and Verizon Wireless customers who don’t have dual-radio phones must do this anyway, as those carriers’ CDMA/EvDO networks are incompatible with the GSM/GPRS networks most other countries use.) If you need a phone, buy a cheap prepaid phone in the country you’re visiting. It will certainly save you money on both voice and data–but remember, you won’t be reachable on your usual cell phone.
The Fine Print: When was the last time you really looked closely at your phone bill? This is a good way to see whether your phone usage is in line with your plan. You might find, for example, that you’re not even close to using the number of minutes you’ve paid for. And while you’re at it, look carefully for all the little charges at the end to make sure you’re not paying for something you never wanted. Case in point: A few years ago a lot of people complained about unsolicited roadside assistance service charges. Who knows what other charges may be lurking now?