New Year, New Phone Service

I did some research during the month of December, prompted by a Consumer Reports article saying that most people could save money by going with a pre-paid cell phone service. I had been thinking about this for months but it took a little work to decide what the best replacement for our cell service should be. Each pre-paid Provider's program is a bit different and depending upon the need certain ones make more or less sense. I started by really examining my cell phone bills for the past 8-10 months. I spent approx. $50/month which included $10 in taxes and averaged 10 cents/minute across the months. Please note: truly heavy cell phone users may be better off sticking with their contract as the more you talk, the cheaper the minutes.

There are Providers which require you to pay only on the days you use it, these are called "Pay as you go" plans (typically $1/day + 10 cents/min) and then there are "Pre-Paid" plans which means you buy chunks of minutes on the front end, at a variety of price points per minute. These chunks of minutes have expiration dates of varying lengths so you need to study that too. Again, you need to think about how often you use the phone.

I also realized I used my cell phone from home a lot to call locally which is a total waste since my land-line can do so for the cost of my local monthly service through Qwest. As a side note I downgraded my local calling plan from one with 3 additional features (voicemail, caller ID & call waiting) that cost $40/month with tax to a plan that costs just $21/month including tax, same unlimited local calls but without the features. Additionally, we bought a phone card at Costco for $20 which will give us 700 long distance minutes for those calls we typically make from home to friends out of state, but used our cell phone out of convenience. The calling card is just under 3 cents/minute as opposed to 10 cents/min!

The pre-paid phone I ended up purchasing was from Costco, via T-mobile, but these phones are also available at Target and a variety of stores around town. Costco gave me a better phone for the money, but again it depends upon your needs.

In total I plan to save about $35-40/month on cell service and nearly $15/month on my landline once I account for the addition of the Costco calling card for a healthy savings of $600-700/year!! Now that is a nice chunk of change.