Dial for dollars with 10-10 calling plans
By Bill Burt • Bankrate.com

You can save money using 10-10 phone services -- especially on international and intrastate calls -- but unless you do the math you could stumble into one of many dial-around money pitfalls.

Unwitting consumers could get burned in several key areas if they do not fully investigate beforehand, says Rich Sayers, editor and founder of 10-10PhoneRates, an independent rate-comparison site.

The 10-10 services, also known as dial-around plans, can generate big savings. They work simply, with no need for a calling card or advance payment.

A 10-10-XXX number works by routing your call around your existing carrier. You simply dial 10-10 (some companies are now using 10-15 or 10-16) and then usually a three-digit number followed by the phone number. That coding "dials around" your existing long-distance carrier to give you cheaper rates. Using the 10-10 system does not affect your existing carrier and you are billed by the 10-10 company, or you can have the charges applied to a credit card.

"If you make a lot of international calls or in-state long distance calls, then dial-around plans make sense," says consumer advocate Nancy Castleman, founder of Good Advice Press.

Nevertheless, she says, "If you are in the habit of phoning one or even a few countries on a regular basis, you should consider signing up for more than one plan -- that way ensuring you are always getting the best deal possible, depending on your needs."

Paul Richard, executive director of the Institute for Consumer Financial Education, agrees 10-10 plans can mean big savings, but cautions: "While a 10-10 plan may look great when it is advertised on television, you have no guarantee you are getting the best deal until you've researched that company's tolls and pricing policies."

For help comparing the rates and fees of many dial-around plans, visit www.10-10phonerates.com, www.calling-plans.com or www.tele-rates.com.

Unexpected rate and fee hikes
"Consumers and businesses should not call a 10-10 number unless their rates are known upfront," Richard adds, noting the company operating the 10-10-297 service advertised long distance rates of 3 cents a minute, while barely mentioning in their ads that a 39-cent connection fee applied to all calls.

It wasn't the first time a dial-around service surprised its customers, says Sayers, who shares several recent examples:

• The popular 10-10-220 service operated by MCI's TelecomUSA division recently upped its heavily advertised 99-cent offer to $1.74 per 20-minute call -- a 75 percent increase -- without giving users prior warning.
• AT&T's 10-10-345 service increased its connection fees for most international calls in November from 30 cents to as much as 99 cents. Again, users were not notified unless they subscribed to an e-mail alert.
• WorldxChange, a discount operation, surprised customers in October with an unannounced $2.50 low-usage fee -- affecting 10-10-629, 101-5335 and 101-6789 users who make less than $3 worth of calls in any given month. Customers who opt for online billing rather than a paper bill are excluded from the fee.

Tricks and traps
While the dial-around plans can produce significant savings, Richard says, the smart consumer should always be on the lookout for potential problems:

• Be alert to rate changes for your plan. Some dial-around plans will advertise a new rate but continue billing existing customers the previous rate. You should update yourself frequently on the plan you're using or simply call and ask for lower rates.
• Don't automatically go by rates published online -- many are not updated regularly and carry incorrect information. Double-check via the carrier's toll-free customer-service line.
• Always know in advance where your 10-10 plan will and won't work. Some 10-10 calls may not be possible from some hotels or pay phones, for example.
• While it's usually OK to use a number advertised on TV, it's very risky to use it if it hasn't advertised a discounted rate plan with it. If you dial a company's 1010-XXX number without knowing the rates -- or without signing up for a specific plan in advance -- you could be hit with astronomical charges under what some carriers call their "casual user rate."

6 simple questions
Consumer expert Castleman suggests you always ask yourself these questions before signing up for a 10-10 plan:

How would you use this service? Do you call in-state, out of state or out of the country? How many minutes do you generally use per call? Do you often not reach your party or connect with an answering machine? Take your typical usage pattern and apply it to various plans to see what would work best for you.

What's the per-call rate, if any? A per-call charge, for example, can make dial-arounds expensive if you don't reach the party you're calling or if you continually reach an answering machine.

What are the billing increments? Some companies, for example, offer 6-second billing increments while others bill in increments of 3 minutes. Under the first plan a call lasting 4 minutes, 30 seconds would be billed for exactly that amount of time while the latter would be billed for 6 full minutes.

What's the best per-minute rate? Find out if you're looking at the best rate the company offers. It may not be.

What about in-state long-distance dialing? Keep close tabs on these calls. Some plans charge more, some plans don't cover these at all.

Are there other hidden costs? Always check, for example, to see if there's a monthly fee.

Want more money-saving tips on phones? See Getting a good deal on a cell phone, and Watch out for phone bill cramming.

Bill Burt is a freelance writer based in Florida.