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Is Your Cell Phone Bill Too High? You could save hundreds of dollars a year if you switch to a no-contract plan. Americans waste an average of nearly $350 a year on wireless service, according to BillShrink, a service that compares rates – http://www.kiplinger.com/magazine/archives/is-your-cell-phone-bill-too-high.html– for phone plans, among other products. Most of the excess spending comes from overestimating how many voice minutes and text messages they need and underestimating how much data usage their plans should cover. It doesn t help that plans from the major wireless carriers make it difficult to balance voice, text and data offerings to get the best price.
As the big carriers grapple with rapid changes in phone technology and competition from Skype and other Internet calling services, their service plans are becoming more and more complex — leaving consumers with a maze of prices and services to navigate. Plus, wireless providers have designed a golden-handcuffs business – for their customers -that dangles an inexpensive or free phone in exchange for committing to a two-year contract. Breaking that contract means you re on the hook for a prorated fee that can be as high as $350. And to entice you to stay, your carrier is likely to nudge you to upgrade to a slick new gadget just as your contract is about to expire. When it s time to renew your wireless contract, think twice about your options before you sign on the dotted line. These FAQs will help you figure out whether you ll benefit from switching to a no-contract plan.
Is there a downside to a no-contract plan? The lack of commitment you enjoy with a contract-free plan also works in a carrier s favor: It can boost rates and change terms anytime. And if you have a prepaid plan and fail to reload your account by the expiration date or a specified time thereafter, you may risk losing your phone number. Also, some plans have extra fees, such as activation charges or daily access charges. And sometimes the phone rebates associated with no-contract programs require you to maintain service for a certain amount of time.
Do I have to wait until the end of my contract to switch? No. Most carriers now charge a prorated fee when you exit a contract early rather than impose the full fee. If you are tethered to a contract, an early-termination fee could be worth the cost if you’d save a lot by switching to a new plan. If you re waiting out your contract s term and want to trim costs, study your most recent bill for each fee, or call your carrier and ask for a breakdown of the expenses line by line. Usually, you re obligated to keep only core services, such as voice, text and data plans. You can drop anything else, such as insurance or a carrier s proprietary navigation application.
How do I make the switch?
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