smart spending

4 ways to cut your phone bill

Toll-free services, while inexpensive, are not necessarily cheaper than calling cards. Some might advertise teaser rates, but check the fine print. The low rates may not kick in until several minutes into the call. Make sure you're familiar with terms and conditions before using these services.

Use a prepaid cell phone instead of a monthly plan 

Another way to save money on your phone bill is to use a prepaid cell phone to reduce your expenses. Prepaid wireless carriers, such as Net10 and TracFone, can offer no-contract options and predictable monthly phone bills.

They can also offer decent long-distance rates -- although not as low as the rates offered by calling cards and toll-free services.

"If you have a cell phone and you use it for long distance, there's really no need to have traditional long-distance at your house," Brixey says.

Traditional cell phone plans can charge you big bucks if you go over the monthly allotment of minutes. Prepaid phones, however, don't let you fall into that trap. You can only use up to the amount for which you've already paid.

Rates on prepaid plans range from about 10 cents to 20 cents per minute, and many providers offer promotional rates.

Although the rates for prepaid cell phones can be cheaper than traditional phone charges, you do have to consider the possibility of the cell phone dropping phone calls and having bad sound reception.

You should also be aware of what you're paying for. It may seem simple to pay a lump sum for a set number of minutes, but many prepaid plans subtract daily usage fees and even roaming charges from your balance. You may find that if you make more calls during the day, you use up your prepaid time faster than if you talk mostly at nights or on weekends.

Also, if you don't use the minutes you buy for your prepaid phone within a set time frame, you might lose them. You could also lose the right to your cell phone number if you don't renew the service when it expires, which could be as often as monthly. Be sure to read the terms and conditions of any offer before agreeing to the service.

Eliminate pricey extras, such as caller ID and call waiting 

If you have a traditional phone line, do you really need pricey options such as caller ID, call waiting and call forwarding?

"Don't forget that making fewer calls and using fewer services is probably the quickest and easiest way to reduce your phone bill," Jordan says.

Although your phone company may make these services available on a per-use basis, the charge typically will be much higher per use than if you carried these charges as part of your monthly plan.

Also, you could be charged a penalty to adjust your plan if you're already locked into a contract. If that's the case, make an appeal to change the features without penalty.

"It's worth a try to get a rate reduced," Jordan says. "You just have to use patience and perseverance. When someone in customer service says they can't help you, my favorite phrase is, 'That is unacceptable. Who do I need to talk to who can help me?'"

Not all basic plans or minimum-service plans (where you only use phone service for a set number of hours) are available in all regions. In many cases, you have to choose a bundled plan, even if it offers fewer features than a typical telephone package.

Try Internet phone services 

You can tap the power of the Internet to reduce your phone bills. Companies like Vonage, Skype and magicJack use voice over Internet protocol, or VoIP, technology to offer potentially cheaper phone services.

With VoIP, telephone calls are converted into data, sent over the Internet and converted back into sound for the recipient on the other end of the call.

"(VoIP) is the next generation of telephone service," says Andy Abramson, editor of the VoIPWatch blog. "It provides users with a lot more than what a regular telephone company offers, including all the extra features, for a lower price."

Features like call waiting, caller ID, voicemail and call forwarding are typically included in these plans. Many plans also let users retrieve voice mails via e-mail.

In addition, VoIP services may allow home and cell phones to ring simultaneously, so the user can answer the call no matter where he or she is.

The cost for VoIP services vary widely. Many providers charge around $20 a month, but some services can be less than $50 a year or even free (when you call people who use the same service). Many of these services allow unlimited long-distance calls within the United States and Canada as part of their basic fee.

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International calling rates can be cheap, too.

"I had an hour-long conversation with a friend in South Africa," says Jim Taylor, a VoIP customer in Birmingham, Ala. "When I hung up the phone, I went online to my service provider, logged in and saw what it cost. The charge was under $6."

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