You finally broke down and got one of those smart phones and were feeling pretty good about it too until you opened your first bill. Ouch! Bill shock. All those apps use a lot of data and that data cost money.
Well, the phone companies aren't stupid, so it appears that in order to stem customer outrage and attract new customers who didn't want to pay much to begin with, they're about to introduce some lower priced data plans this week. AT&T already announced it was going to offer a reduced data plan.
Following AT&T's lead, both Verizon Wireless and T-Mobile are expected to unveil new cell phone data plans that offer lower prices if you're willing to give up unlimited data plans. But, wait there's a catch. There usually is. The $15 you save with the reduced plan might not be worth it - and if you switch, there could be no going back.
The cell phone companies are using these cheaper, limited data plans to attract those buyers who were turned off by the typical $30 monthly data charges they get when they buy a smartphone. In exchange for the lower price, users agree to pay extra if they exceed their limit, which earns more money for the providers.
This may not be a problem today, but as you increase those apps and use your phone for data-intensive activities like watching videos and getting driving directions, you're more likely to go over the limit. And that's going to cost you even more than the unlimited plan you gave up.
After hitting T-Mobile's 200 megabyte limit, users would pay more than $10 in extra data charges for every half-hour TV show or every 6.5 hours of a streaming music service.
So before you ditch your unlimited data plan, here's what you need to know. It takes just two half-hour sitcoms to blow through 200 megabytes - typically the limit on the cheapest tier. If you're streaming music or video for more than four hours a day, you'll exhaust the higher, 2GB limit. And that's not even counting simple tasks like texting, web browsing and e-mail. Video is likely to become a bigger part of regular cell phone use in the near future, as streaming full-length TV shows and movies becomes easier, and new features enable easy video conferencing. .
Smartphone users who primarily access the web and e-mail have the least to worry about. Those tasks don't use much data, which makes it unlikely you'd reach even the smaller cap.
Android owners tend to be heavy Google Tools users, using more data by repeatedly synching calendars, documents and other content. One saving grace for consumers: More phones support wireless connections and switch to WiFi automatically when it's available. That's a free connection for people who want to use their phone for video or other intensive features and doesn't affect a data plan. You can find a WiFi icon in your phone's connection status bar, next to the bars indicating your cell phone signal strength.
If you're looking for ways to keep you cell phone bill from getting out of control, here are a few tips from CBS Moneywatch.
1. Call Customer Service and ask for a better deal. It costs the companies far less to negotiate with you than to lose you as a customer all together. So cell phone companies have customer retention departments for the purpose of offering you perks, deals and discounts to keep you happy. Mention competitors' deals and that you've been a longtime customer.
2. Monitor Usage. While the FCC is pushing to force cell phone companies to alert us before we exceed our monthly minutes, it's still our responsibility to pay close attention. Otherwise, going over the allotted minutes in your cell plan can cost anywhere from 40 to 50 cents per minute. Reach out to your cell provider to get alerts either via text or by dialing (both free). Verizon users, for example, can call #MIN and get an update via text message. There are also a growing number of free iPhone apps for AT&T customers - like Cell Minute Tracker that help you track usage and monitor your monthly bill.
3. Try Friends & Family Plans. This can include anyone you know - it could be a roommate, a boyfriend, girlfriend, or even an upstairs neighbor. If there's someone you want to pair up with to qualify for the friends and family rate, the savings could be worth it. Just make sure it's someone you trust: One of you will be on the hook for the entire bill. (You can try to get the bill split up, but the policy varies carrier.) What's the payoff? At T-Mobile, an $60-per-month personal plan drops to $50 when you add another line: a $120 annual savings. Verizon and T-Mobile, meanwhile, have plans that let you add up to five phone numbers that you can connect to free of charge - regardless of the other person's carrier, and even if it's a land line.
4. Use In-Network or
5. Go Prepaid. Pay-as-you-go phones typically cost 10 cents per minute plus a small daily access fee - say, $1 each day the phone is used. It's like a cell phone with training wheels - and a smart option if you're on a tight budget, or for parents who want to control their kids' cell phone usage. Just make sure whatever plan you choose allows you to rollover any minutes you don't use to the next month.