4 Signs You’re Overpaying for Your Cell Phone Plan
Written by
Cynthia Measom
Edited by
Zuri Anderson
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In a perfect world, your cell phone carrier would contact you whenever it could save you money, but that’s just not the case. Instead, it’s up to you to know what you’re being charged each month and whether you’re paying too much.
Here are four signs your cell phone plan is too expensive. And if you need some tips, a budgeting expert revealed how you can save on phone plans, even with an iPhone.
You’re Paying for a Plan You Don’t Use
If it’s been a while since you’ve signed up for your current cell phone plan, it’s time to reevaluate it. The best way to find out if you’re overpaying is to consider if you’re actually getting the best value from your current plan or if you’re paying for features you don’t need. For example, if you pay for unlimited data but are usually connected to Wi-Fi, switching to a smaller data plan could lower your bill.
‘Hidden’ Fees Are Inflating Your Bill
Administrative and cost-recovery charges are common among major carriers, but smaller carriers may include these charges in their upfront price.
AT&T adds a $3.49 “Administrative & Regulatory Cost Recovery Fee” per line each month, which isn’t a government tax but a carrier-created charge to cover its internal costs. On Dec. 1, the fee will increase to $3.99 per line. Verizon has a nearly identical $3.50 “Administrative and Telco Recovery Charge,” as reported by The Verge.
These small fees look minor on paper but can unexpectedly raise a family plan’s total by $7 to $8, or more, every month.
With a smaller carrier, such as Visible, the plan price you see includes taxes and fees, which means there are no surprises when the bill comes. With larger carriers, the extra fees that aren’t rolled into the plan price but charged separately can make your plan seem cheaper upfront than it actually will be. The result being that once you get your bill, you’ll feel like you’re overpaying.
Compare your plan’s base cost to the total charges to get an idea of how much extra you’re paying. Then, trace those charges to the source to find out whether you can reduce them.
You Haven’t Taken Advantage of Available Discounts
Most major carriers offer discounts tied to autopay, paperless billing or employment status, according to Experian. For example, AT&T gives up to $10 off per line when you enroll in autopay and paperless billing. Additionally, its Signature Program adds discounts for employees, students and teachers. Check with your carrier to see what discounts it can offer you.
You Haven’t Shopped Around
Many families could save over $2,200 a year by switching to smaller carriers — aka mobile virtual network operators — per a report from WhistleOut.
For example, Visible, which runs on Verizon’s network, is offering unlimited data plans for as low as $19 a month, which shows how much cheaper MVNO carriers can be. Keep in mind, however, that there are trade-offs when switching to a MVNO as compared to a major carrier, including very few perks, a smaller phone selection, and a greater chance of decreased network speed during peak times.
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