Cut your cell-phone costs

Last reviewed: January 2011
January 2011 issue cover This article appeared in
January 2011 Consumer Reports Magazine.
Latest on Cell phones and services

1. Buy your phone at Costco

This warehouse store was the only retailer to receive top marks for price and service in a 2009 Consumer Reports survey of places to buy cell phones. As an example of Costco's prices, we found the Verizon Motorola Droid X for $100 at, compared with $300 with a $100 rebate at a Verizon store.

2. Monitor use and act as needed

To avoid being among the one in five readers who got higher-than-expected bills, often for going over their plan limit, check your use midway through the billing cycle via Settings on your phone. sells smart-phone apps that monitor usage and send you a text or e-mail warning about overages.

If you're going to exceed your allotment, temporarily switch to a higher-limit plan backdated to the start of the billing cycle. If you've already received a shocking bill, don't emulate the 9 percent of survey respondents who simply paid an unexpectedly high bill without a peep.

Call the carrier and ask to have the penalties reduced or removed. That worked for 36 percent of the bill-shocked group; only 10 percent of them were unsuccessful. Of the remaining respondents, 3 percent were waiting for the dispute to be resolved, and 7 percent had other outcomes.

3. Check employee discounts

AT&T, Sprint, T-Mobile, U.S. Cellular, and Verizon offer discounts to the employees of companies that use their service. To see whether you qualify, Google the carrier's name and "employee discount," and navigate to the Web page that asks for your work e-mail address. Discounts can be as high as 20 percent, though some deals exclude the Apple iPhone or certain service plans.

4. Weigh Walmart Family Mobile

Though we lacked sufficient data to rate it, consider this service, a partnership between T-Mobile and the retailer. It offers a few T-Mobile phones running on T-Mobile's network. Some of the phones and service plans cost less than at T-Mobile. If Walmart doesn't have the phone you want, conventional or smart, you can buy one at the no-contract price from T-Mobile and transfer it to a Walmart Family Mobile plan, the carrier's spokesman said.

5. Don't overbuy minutes

In our 2009 survey more than a third of respondents with allotments of minutes used half or less of what they paid for. That's because the monthly fee also buys lots of "free" night, weekend, in-network wireless, and calling-list minutes.

Review the voice minutes you have used and not used in the past six months. You might be able to switch to a plan with fewer billable daytime/anytime minutes, provided it offers the same free talk-time benefits.

6. Avoid termination fees

Sixteen percent of our readers with a contract wanted to switch carriers but didn't want to get hit with early-termination fees that can run as high as $350 per phone early in the contract term. (Penalties gradually decline the further along you get in the contract term.)

Instead, consider transferring your contract to someone else for a $20 to $25 fee through or To avoid being stuck with a disappointing carrier, test the phone and service during the 15- to 30-day trial period, when you can quit and port your number to another carrier without penalty.

7. Weigh monthly costs, too

The purchase price of the phone, especially a smart phone, can be a surprisingly small contributor to the total cost of owning it over, say, a two-year period. That's especially true for T-Mobile smart phones, which you can buy with or without a contract, at differing prices and fees.

For example, with a T-Mobile contract, you get two new Motorola Cliq XT smart phones free. Two years of unlimited talk, text, and data service costs $4,320. Without a contract, you pay for the phones but equivalent monthly service costs less, so the two-year total is $4,020, a saving of $300. But if you buy those Cliq XTs from Walmart Family Mobile, a partner with T-Mobile, you pay less for the phones and comparable no-contract service. The total for two years is $2,420, far less than either T-Mobile option.

8. Consider a family plan

If you need four cell lines, for instance, a family plan can save through shared minutes and add-a-line prices that tend to be lower than fees for separate lines.