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How to cut your phone bill

Five tips to help you save money

Published: March 2012

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1. Don’t automatically buy from the company store. Two-thirds of cell phones are bought at carrier stores, but our reporting suggests prices there can be higher than at warehouse stores, mass merchandisers such as Walmart, and electronics stores such as RadioShack. In fact, a carrier’s walk-in stores can be even pricier than the company’s own website.

When we shopped for two dozen smart phones we recommended at 12 retailers in the San Francisco Bay area last October, the carrier stores for AT&T, Sprint, T-Mobile, and Verizon had the highest prices for more than three-quarters of the phones. We’ve found phones to be especially inexpensive at Costco. But you may not find the exact model you want there—or at any retailer for that matter. All retailers don’t sell phones for all carriers, and all models might not be available everywhere.

2. Consider a low-priced carrier. It’s not easy to compare carriers’ plans across or even within carriers, because their buckets of minutes, messages, and megabytes differ. But you can find competing plans that are similar enough to give you an idea of their relative value.

When we compared 100 plans to similar alternatives in 21 matchups covering the full spectrum of plans, both prepaid and standard, Consumer Cellular came out on top. It had the best deal most often—in more than one out of three cases. The next-best deals, in order, were from T-Mobile, Sprint, Metro PCS, Net10, Straight Talk, T-Mobile prepaid, and U.S. Cellular.

With savings that usually ranged from $10 to $40 a month over pricier rivals such as Verizon and AT&T, some of those carriers not surprisingly received higher reader marks for value in our service Ratings. But not every high-scoring carrier had the best prices, and you may not find many, if any, of the hottest smart phones in the model lineup of smaller and prepaid carriers.

Thinking about changing your wireless company? We'll help you find the best cell phone carrier.

3. Use alternative services. Bypassing the carrier and using third-party services for texting and voice calls can be a money-saver. But there are trade-offs. Text messages, including a maximum 160 bytes of data, are outrageously priced à la carte by the carrier at 10 cents each. (Translated into data terms, that’s about $625,000 per gigabyte vs. the going rate of $8 to $40 per GB for wireless data plans.) International texts and texting while abroad can cost more—about 20 to 50 cents per message.

New apps such as Heywire and TigerText let you send text messages free over your data connection. Typically you use a special receiving phone number assigned to you by the service to avoid charges on your cell number. With most carriers, that means you won’t have to pay your carrier 10 cents a pop or $5 to $30 a month for limited-to-unlimited messaging plans. (Data charges do apply if you text using the cellular data network rather than Wi-Fi, but that should have little impact on your bill because texts contain so little data.)

We tried both services on Android phones. Heywire worked fast and intuitively, and it’s free—provided you accept fairly unobtrusive ads along the bottom of the message-thread page. But TigerText, whose selling points include private messages that self-destruct after a certain time, didn’t work for us.

Skype Mobile lets you make free voice calls to other Skype subscribers in the U.S. and worldwide using your smart phone. That’s especially helpful for international calls, which tend to be even pricier on cell phones than on landlines. Skyping uses your carrier’s data service, so such calls don’t count against your cell plan voice minutes, but these VoIP calls eat data at the rate of about 3 megabytes per minute. If you use Skype over a Wi-Fi network rather than on the carrier’s network, you don’t cut into your monthly metered data allocations.

4. Max out on Wi-Fi. Avoid using your plan’s allotment of data by tapping into the rising number of Wi-Fi networks that are available. Your home and work networks are obvious choices. But your cable company or Internet service provider might offer access to its own free, local Wi-Fi hotspots with your subscription, as does Time Warner Cable around the New York/New Jersey metro area and Comcast in the Philadelphia/New Jersey area.

You’ll also find free public Wi-Fi hotspots at airports, libraries, universities, sports stadiums, and cafés. AT&T wireless customers can use 29,000 mostly free, unlimited Wi-Fi locations around the U.S., many of which are in more than 6,800 company-operated Starbucks and 11,500 McDonald’s locations, free for all customers.

There’s another way to limit data use on 4G phones, where faster network speeds can eat up your allotted monthly data more quickly. If you find that 3G speeds are just as good as 4G for activities such as texting or streaming music, set your 4G phone (via its Settings) to connect only to 3G.

5. Investigate 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 iPhone or certain service plans.

Editor's Note:

This article originally appeared in the January 2012 issue of Consumer Reports magazine.

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