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How to get a good deal on a cell phone

Cell phone users, listen up.

Hear that loud noise coming from your phone? That's the sound of your hard-earned money being sucked away by a calling plan that doesn't fit your needs.

It happens all the time. Lots of folks walk into a shop, find a cell phone they like and sign a contract on the spot.

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"They're more concerned about the color of the phone than the contract they're signing," says Rosemary Kimball, a spokeswoman for the Federal Communications Commission. "And then they get a lot of surprises."

The biggest surprise is just how much a cell phone is costing them each month. The most expensive mistake you can make is signing up for a calling plan with a rock-bottom rate and exceeding your allotted airtime each month.

"We have clients that have cell phone charges well over $300 a month," says Steve Rhode, president of Myvesta.org, a financial crisis and treatment center. "They're really charged the maximum amount for every call."

One client signed on for a calling plan with a basic monthly fee of $29.99 and wound up with bills of almost $500 a month. The reason? He was way over his allotment of free minutes each month and had to pay heavy long-distance and roaming charges on a ton of calls.

Rhode advised him to switch to a calling plan costing $99.95 a month with free long-distance and roaming. You pay roaming charges when you make and receive calls outside your home calling area.

"We changed his plan so it included everything and he didn't have any extra charges," Rhode says.

Of course, signing up for a plan with too many minutes isn't ideal either.

"If you have minutes left over, you might want to consider reducing your plan to a less expensive one because you're just wasting those minutes," Rhode says.

Getting the best deal
How do you go about scoring a super deal on a cell phone plan that's right for you? Zero in on your calling needs, brush up on your cell phone terminology and then research, research, research.

"Figure out what your calling pattern is," Kimball says. "When you call and where you call are crucial. Those are two things to ask yourself and work into your plan."

Having trouble getting a handle on your calling habits? Answering these questions will help:

  • What time of day do you make most of your calls? Do you make a bunch of calls on weekends or weekdays or both? Do you make a lot of long-distance calls?

  • How long does a typical call last?

  • Who has your cell phone number? Everyone you know? A few close friends and family? Keep in mind that with a cell phone you're paying for calls that you receive as well as calls that you make.

  • Do you travel a lot? How often do you use your phone outside your home calling area? Someone who travels a lot should consider a plan with no roaming or long-distance charges.

Once you assess your calling needs, take a closer look at your calling plan. Get out your bills, get out your contract and start reading.

Here are some important terms to look for.

Basic monthly fee: This fee, which some providers call a service charge, is the monthly amount you pay to receive cellular phone service. This fee is fixed. You pay the same amount each month, regardless of how much or how little you use your phone.

Airtime: These are the charges you pay for time spent talking on a cell phone. If you exceed the monthly allotment of minutes included in your calling plan, a higher per-minute fee may kick in. Are you talking well beyond or well below your minutes each month? If so, it might be time for a new calling plan.

Long-distance rate: This is the rate you pay per minute for calls outside of your local area. If you make a lot of long-distance calls each month, you may want to consider a plan that includes long-distance calling in the cost of your airtime.

"In this day and age, you shouldn't be paying extra for long-distance," says Joni Blecher, who writes the "Ask the Cell Phone Diva" column for CNET.com.

Roaming charge: This is the cost you pay for the ability to make and receive calls outside your home calling area. Roaming charges can get really expensive. If you travel a lot outside your home calling area, you may want to opt for a plan without an additional per-minute fee for roaming.

Peak: Peak hours are the times, typically on weekdays, when a cell phone user pays the maximum rate for calls.

Off Peak: Off-peak hours are the times, typically weekday evenings and weekends, when a cell phone user pays a discounted rate for calls. Off-peak hours used to begin as early as 6 p.m. on weeknights. But these days you'll be hard-pressed to find off-peak hours beginning before 8 p.m. or 9 p.m. on a weeknight. Be sure to check for any changes in off-peak hours when you renew a cell phone contract.

Cancellation Charge: This is a charge, ranging from $100 to $200, that you pay for canceling a cell phone contract. If you cancel your cell phone contract and sign up for a plan with another company, you'll probably pay a hefty cancellation fee. But the fee may be worth it, if the new calling plan will save you a ton of money.

-- Updated: May 12, 2004



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