The average cell-phone user spends about $600 a year on mobile service, while families that talk, text, or use other phone features more than average can spend upward of $1,800. And the bigger your bill, the more you get tapped for service taxes and surcharges, which tack on an average of 14.5 percent.
But you can pay less and keep on talking by following the strategies below. Sample savings shown are per year, unless otherwise indicated.
Prepaid is just like a traditional monthly cell-phone plan except that you only buy what you need, you pay in advance, and there's no contract. Compared with the cheapest monthly plans, we found annual prepaid savings of $240 to $360 for infrequent users with T-Mobile's Pay As You Go plan, $100 to $220 for an average two-phone family buying Virgin Mobile per-minute packs, and $600 to $1,080 for big talkers using Boost Mobile's unlimited national plan.
Review your bills for the last six months with an eye on the billable daytime minutes. You might have bought a plan that included many more daytime minutes than you need, especially if you mostly use your phone when it's free—during nights and weekends or for in-network calls. Switch to a less-expensive plan with fewer daytime minutes.
Voice service is now a cheap commodity, so carriers are pushing smarter, sexier phones and services to wring more dollars out of consumers. For example, Sprint's 450-minute plans cost $40 a month for just Talk, $50 for Everything Messaging, and $70 for Everything Data, including talk, messaging, Web browsing, e-mail, Blackberry Internet Services, music, TV, GPS, and even NFL Mobile Live. Unless you really expect to use those features, save by sticking with basic talk service.
At 20 to 25 cents for à la carte messaging, buy a bundle if you send a lot of text, picture, or video messages each month. T-Mobile charges the least for an add-on bundle ($5 for 400 messages). Costs for Web browsing will rack up quickly if you pay by the megabyte. So sign up for unlimited service if you must have mobile Internet. AT&T's $15 unlimited Web add-on is cheapest.
AT&T, Sprint, T-Mobile, and Verizon offer discounts to the employees of companies that use their service. To see whether you qualify, do a Google search for the carrier's name and the words “employee discount." You'll navigate to a 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.
Avoid hefty overage charges of up to 45 cents per minute by temporarily switching to a plan with more minutes if travel or a family crisis will cause a spike in usage. Talk to a live customer-service representative to make sure you don't get hit with surprise overage charges, which can happen if you switch at the wrong time in your billing cycle. Switch back when life returns to normal. Carriers no longer require a contract extension for such changes.
Upload an electronic version of your monthly bill to www.billshrink.com for an analysis. The company will then check available wireless plans and recommend those it says are probably cheapest for your needs. The service is free. Another company, Validas, offers a similar analysis for $5.
If you mostly use your cell phone locally, consider Metro PCS, which offers plans in 11 areas, including Atlanta, Dallas, Detroit, and numerous cities in California and Florida. The company sells prepaid, unlimited local calling plans for as little as $30 a month. Roaming charges, of course, apply outside the local areas.
Avoid huge early-termination fees and unsatisfactory service by first checking our cell-service Ratings. Then be sure to test the phone and service during the carrier's 15- to 30-day trial period. If you're not happy with the carrier, you can quit and port your number elsewhere without an early-termination penalty.
If you upgrade your phone, save the old one as a backup replacement in case you lose or damage the new one. You can eventually get another new phone at little or no up-front cost when your contract comes up for renewal.
This article appeared in the May 2009 issue of Consumer Reports Money Adviser.