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Save Hundreds on Cellular Phones

This is the first posting of this article. 7-13-99. Feel free to respond after you read it.

I worked a long time to get the research for this article. Actually I made this article a while ago and have been selling it. I now offer it here for free. No portion of this list may be recreated or redistributed without prior consent by the owner. (That would be me.)

Disclaimer: I am by no means an expert in the cellular industry. I have simply created this report so others can learn ways of decreasing their cellular phone bill. I do not have the means of keeping up with every change in every area in the U.S. I do not have information about specials/sales/etc. in your area. However, this article has the techniques you can use to find out the information yourself. That's the whole point of this article. Not to give you the lowest prices, but to teach you how to find those lower prices for yourself.

Table of contents

The first rules of cellular phone companies

Why is my bill so high?

What to look out for in a contract

Tips on saving before the sale

Tips on saving after the sale

The first rules of cellular phone companies

The Cellular Phone Companies are not there to make you happy, they are there to make a profit.

No, really. It's true.

They act nice. After all, it's their job to make you happy and spending money on them. However, the truth is that they are a for-profit company. They want to make more money than they spend. One of the ways to accomplish this feat is to make you believe that you are getting more than what you are for what you're paying.

Usually, a cellular phone is a luxury item, not a utility.

Many people have gotten the idea that cellular phones are the same in function and price as regular phones and think of them as a utility item. That is completely wrong. Your typical home needs a phone, electricity, water, etc. They do not need a cell phone. They want one. that's the difference. While there are exceptions (people living where normal phone lines are not located, etc.) they are few and far between.

The sales staff is not your friend.

You must keep in mind that the sales staff is rewarded for how many people they sign up. If fact most of the sales staff in any cellular company is working on a commission-only basis. In other words, if they don't sign you up, they don't get paid.
Once you understand how much pressure that is, you are better prepared to handle them and do business with them.

When you hear "free", ask yourself "how are they making their money?"

The companies are going to give you free items for only three reasons.
1. To entice you to buy something else at a higher profit margin.
2. To keep you from going to the competition.
3. To entice you to buy something else at a higher profit margin.

Why is my bill so high?

It seems so simple when the salesman is talking to you. The price seems so low that it's too good to be true...

Then you get that first bill or two. Soon reality sets in.

The problem is that it is too good to be true.

The sales staff very often don't go over the standard charges as well as they should. In many cases, they don't go over the various charges at all. They just tell you the great deal you're getting and get you to sign on.

Typical charges to look out for:

• Connection charge - This is the charge for getting the cell phone turned on when you first get it.
  Typical charge - $49-$100 per cell phone one time fee.

• Security deposit - If your credit has any blemishes, you may be required to pay a security deposit before they will sell you cellular service. The worse your credit, the higher your security deposit will be.
  Typical charge - $100-$600 one time fee.

• Cellular phone - The item itself. Models and prices vary widely. Shop around.
  Typical charge - $99-$250 per phone one time fee

• Equipment accessories - The items other than the cellular phone. Some are mandatory, some are decorative and luxurious in nature. You are not required to get any of these items.
  Items include: batteries, battery chargers, carrying cases, Cigarette lighter adapters, PCMCIA modem connectors, hands-free car kit, and so much more.
  Typical charge - $99-$250 one time fee

• Features - These are the services that are available besides standard cell phone usage. You are not required to get any of these items.
  Standard feature include: voice mail, call waiting, three-way calling, call forwarding, roadside assistance, and many others ranging from useful to exotic.
  Typical charge - varies by feature and company

• Monthly access - The charge you pay for the service of using the cellular phone. Often comes with the block of minutes that you expect to use.
  Typical charge - $14.95-$200 per month

• Air times - The total time of your calls. The clock starts when you push "send" (yes), and does not end until you push "end" (no). It is measured in per-minute increments with partial minutes being rounded up to the next minute. (Example: If you place a call and it takes them 45 seconds to answer, then you talk for 5 minutes 14 seconds and then you hit "end" two seconds later, you will be billed 7 minutes air time.)
  Typical charge - $.15-$1.00 per minute

• Long distance - The charge for any call that is long distance. Long distance is generally defined as outside of your local service area.
  Typical charge - Standard long distance rates

• Country to country - The charge for accessing countries other than your own (typically the USA)
  Typical charge - Standard country connection rates

• Roaming - The charge for placing a call from somewhere other that your home area. The reason for this fee is that you are paying access to someone else's cellular tower.
  Typical charge - $1-$4 per minute

• Roaming connection per call - Initial connection fee each time you use your cell phone in a roaming area.
  Typical charge - $1-$4 per call

• Taxes - Long distance, 911, usage, sales, and other taxes will be added to your bill. This is not an option.
  Typical charge - varies

• Detailed billing - With some companies, if you want to see exactly where your money is going instead of a brief report, it's gonna cost ya.
  Typical charge - $2-$4 per month

• Insurance - A standard protection plan offered to protect from theft, damage, loss, etc. Very often not needed. Caution: if you don't have insurance and something happens to the cell phone, you may still be required to buy a new cell phone and you will still be charged your monthly fees. If you do get insurance remember that there may be a deductible, which means you must pay for the first amount of the claim before the insurance kicks in.
  Typical charge - $3-$5 per month

• Disconnecting - The charge for leaving the cellular phone company and breaking your contract. Often a 30 day notice is required whether you are on contract or not.
  Typical charge - $100-$600 per phone

What to look out for in a contract

In many places you may not have a written contract. It may be all on computer. However it is still considered a legal and binding contract. In short here is what the typical contract says:

I "Your name here" agree to pay lots of money to this company for the privilege of using their cellular phone service for the length of this contract (typically one or more years.) I can not get out of this contract without paying lots of money. The company can cancel this contract any time they want and still charge me for it." (In all fairness they typically must give you 30 days notice before they permanently disconnect your service.)

• Fine print - This is the most important part! That is why it is listed first. Nothing that the salesman says matters if the fine print negates it. After you hear all the great things that the advertisements say, read the fine print. Find out how they make their money. Once you've combed through it, give it to your spouse/significant other. Often a new pair of eyes will spot hidden costs that you may not notice.

• Business - One of the sweetest deals is when your business agrees to pay your cell bill. Make sure you fill out the contract so that the business is the responsible party. However, you must still keep the bill down.

• NAME - Remember, you are filling out a binding contract. WHOEVER SIGNS THE CONTRACT IS RESPONSIBLE FOR THE BILL. I can not stress this enough. If you agree to co-sign for someone (a friend or relative) so they can have a cell phone, you are setting yourself up for disaster. All too often people get cellular phones for someone they trust thinking they are doing a favor only to find one day that they are responsible for a huge bill.

• Address - Make sure that you write down the mailing address where the bills will arrive. Some places have no land delivery and everybody in town has a P. O. Box. Write down the P. O. Box.

• Home and work phones - These are contact numbers that the company will call to get a hold of you. If you can not receive personal calls at work, put down a second contact number.

• Contract time - Make sure you know exactly when your contract is up. Keep in mind: Contract time refers to ACTIVE time. If your cellular phone is suspended for any length of time, it does not count toward your contract. Example: If your 1 year contract ends on July 15, and your cell phone was suspended twice for a total of 17 days, your contract is not up until August 1.
• What's negotiable - Rule of thumb is any part of the contract that you fill in is negotiable. Generally the parts you will focus on is: usage time, per minute rate, contract length, etc. Non-negotiable parts include roaming charges.

Tips on saving before the sale

• Research all the companies in your area - Don't forget the small companies. Often they are buying bulk rates from the larger companies and passing the savings on to you, or they are under the umbrella of a large corporation. Same service, lower bill.
• Beware of FREE - The companies will try to entice you with free activation, free cell phones, etc. Closely examine the call charges and rate plans they are selling you to see if they fit your needs. If not, you will end up paying more in the long run.
• Read the fine print - make sure you understand every part of the contract. Read without the sales staff "explaining" anything. Take it with you and bring it back after you read it. Spending an extra ten minute reading could affect how much money you spend for years.
• Call customer service with any questions - Never ask the sales staff! Their job is to make everything look rosy and perfect. Get a knowledgeable person in the customer service staff and become friends with them. Ask for them by name when calling in. Only deal with them unless it is an emergency and they are not available.
• Don't rush to buy - The sales staff may sell you a free cell phone, free activation, and throw in a free battery if you buy in the next 24 hours. Then they offer you a mind-numbing array of features, accessories, and packages. Before you're done you've sent $800 and signed a contract promising them no less then $150 per month for a year. Take your time. Special offers come and go and come back again.
• Make sure the local calling area matches your lifestyle - This may be the most important thing you do.
• Check between analog and digital - Digital has many advantages such as lower price, longer battery life, caller ID, mailbox, etc. Analog has more towers, and larger coverage area. Figure out which one is more useful to you.
• Organize a group discount - Get co-workers and/or soloists together to negotiate a bulk deal. Just remember to structure the contract so everyone is responsible for their own cell phone and usage only.
• Don't shop alone - Many times another pair of eyes on the contract or someone's skeptical ears may notice something that you don't.
• Take it with you to look over - Ask for literature and a copy of the contract (or legal paperwork) and leave. Read it on your own time without a salesman looking over you. Go over it in detail with your significant other. Discuss how, when, and why you are likely to use the cell phone.
• Distinguish between want and need - You will be offered many features and accessories. No matter how wonderful they sound, they may be a waste of money. Consider carefully what items are really necessary, (such as battery) and which are vanity items (such as leather carrying case).

Tips on saving after the sale

• Check bills for wrong charges - The cell phone companies are large, and they do make mistakes. If you find mistakes, inform them A.S.A.P. and ask for a credit.
• Access your voice mail from a land line - Spending time listening to your voice mail messages from your cell phone is a waste. Very often the messages can wait until you reach a regular phone. If they don't tell you what number to call for the "back door" ask your customer service rep.
• Carry a pager - You must pay for incoming calls even if they are from someone you don't want to talk to. Paying for a pager (around $19.95/month for inexpensive service) and giving people that number instead of your cell phone gives you the option of when, or if, to call them back. Check your incoming call charges and see if adding a pager is less expensive.
• Ask for credits - If you have to pay to get a canceled check to dispute a payment, don't forget to ask for a credit for that bank charge. you'll be surprised how much credit the companies will give you to keep you as a customer.

Typical credits you may receive:

• Canceled check fees.
• Calls to your cell phone by the cell phone company.
• Incorrect charges on your bill.
• Reconnect fees.
• Sometimes they offer "goodwill credits" to make you feel better about a negative situation.

• Call customer service with any questions - Never ask the sales staff! Their job is to make everything look rosy and perfect. Get a knowledgeable person in the customer service staff and become friends with them. Ask for them by name when calling in. Only deal with them unless it is an emergency and they are not available. (Yes, this tip is in here twice. This is not a mistake.)
• Make sure the local calling area matches your lifestyle - This may be the most important thing you do.
• Pay the part of the bill that you are not disputing - Remember that even if you are in negotiations about certain charges you are still responsible for the rest of the bill. Not paying them can result in late charges.
• Get rid of unused features - Maybe you don't use three-way calling, or caller ID doesn't matter since you never answer the phone. Go over your bill and find the features that you aren't using. Get rid of them. Often they come in groups. such as call forwarding, 3-way calling, and call waiting for one low price. If you only use two, or less, it may be cheaper to get them separately.
• Pay yourself for introductory specials - If you accept a package deal with short term perks, such as 100 extra minutes for 3 months, then set that money aside in your savings account. When the short term perk expires you may see a big increase in your bill, and you need to be prepared. By getting in the habit of paying as if the special doesn't exist, you get a better idea of what your "real" cellular phone bills are.
• Report lost/stolen phones Immediately - If you suspect your cell phone is stolen and you wait a few weeks to report it, you may be responsible for any charges made it that time.
• Find out how to call toll-free calls - Most times 1-800 is not a free call on cell phones. Many times you must dial #-800, or something similar. Ask your customer service agent.
• Put your payment in a savings account - If you can, put aside money equal to 1 1/2 times your average cell phone bill in a savings account. (Your cell phone company will tell you how much that is.) Over-pay your bill and put it into the savings account. Transfer the exact amount of the bill to your checking. This keeps your savings account active, growing, and earning interest. It also creates a float in your savings account, and you earn interest on more money.
• Take the above a step further - One person I know pays for everything with a no-annual fee credit card. He deposits all his paychecks into a savings account. When the credit card bill arrives he transfers the exact amount to his checking and pays in full.
• Use free calls offered by local businesses - Many times local companies like TV stations, auto towing, radio stations, etc. may contract with your cellular provider to offer free calls to their companies. if you need to call these companies take advantage of these special numbers.
• Wait to make calls from a land phone - Many times, the calls made in the car can wait until we reach our destination.
• Try to make your calls on off-peak times - Obviously business or emergency calls don't have much of a choice. Know when the off-peak times start and end. Sometimes your definition of weekends and nights differ from theirs. If you can wait a few minutes to make a call to save money...
• Reevaluate your usage every couple of months - Go over 2-3 months of your cellular bill. If you find that the package plan you are paying for includes too many, or worse, not enough minutes, call and change to a different plan.
• Ask for a bill analysis - If you are not sure if another plan would be better, call customer service and ask them to do a bill analysis. They will examine your bill for you and compare other plans to see if they can save you money. They can do this at any time, but this is especially important when getting ready to renew a contract.
• Suspend the cell phone if you're not using it - If you are not going to be using your phone for a while. (If you do seasonal work and are done until next year, or you're on a trip without the phone.) you can call the company and request service suspension for a period of time. Make sure to request a specific time frame. (Voluntary suspension may be limited to a month or so. Check with your customer service rep.) Remember that you are still locked into a contract and suspension stops the clock.
• Call in late payments - If you are going to be late paying your bill, call them and tell them exactly when you will send it. This may save you from late fees, being suspended and paying reconnect fees.

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