smart spending

7 effective ways you can tackle high fees

Watch out for fees on service contracts
Watch out for fees on service contracts © tarakbr/Shutterstock.com

Watch out for upgrade fees and early termination fees when a service contract provides you equipment such as satellite dishes, cable boxes, digital video recording devices and high-end smartphones. Upfront costs are low, but monthly service fees, upgrade fees and early termination fees protect the service company -- not you.

"When upgrading a smartphone and renewing a contract, be prepared for an upgrade fee" and a prorated new service, Breyault says.

He says consumers only have leverage against service companies when they are outside of a contract because they can bypass high early termination fees. Carriers justify the early termination fee by arguing that expensive equipment costs must be recouped if customers cancel. Out-of-contract smartphones are drastically more expensive because you pay upfront for it instead of through higher guaranteed monthly service fees. But you have the freedom to switch carriers.

Getting help

  • Research all upgrade or early termination fees in your service contract.
  • Consider buying a smartphone outright with a prepaid service if your coverage area is acceptable. Check the phone company's nationwide coverage map.
  • Call, write and complain if employees failed to notify you of added bill charges upon upgrading or canceling a contract.

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