Why the Average American Overpays on Phone Bills

Despite the availability of affordable monthly smartphone plans, many Americans pay way too much for smartphone service. If you don’t understand everything on your bill, keep reading to find out where you might be paying too much and how to fix the problem.

Two-Year Contract

The two-year contract isn’t fashionable anymore because it’s too expensive and too impractical for most Americans. Considering your smartphone needs might change in a month, being locked into a contract is hugely inconvenient. People believe smartphones are cheaper on contracts, but when you add up the total cost, savings on your smartphone model are eaten up when you factor in how much more expensive your monthly bill is.

A contract often pushes you into data, talk, and text options that you don’t really need. When you go with a month-to-month plan, you can change things at any time without paying early termination fees.

Paying for Extra Data

Take a hard look at how much data you actually use. Everyone’s data needs are different, so the next time your phone bill comes in, check how much you’re paying for versus how much you’re using. Data expenses get you in one of two ways: Either you only use a fraction of the data you pay for, or you consistently go over your data limit.

In the first scenario, opt for a smaller data plan. If you’re worried about going over, just remember that you can connect to Wi-Fi wherever it’s available so you won’t be using any data. In the second scenario, even Wi-Fi access doesn’t give you the data break you need. Switch to unlimited data on a trustworthy network, like T-Mobile’s 4G LTE network, to fulfill your data needs without making your bill skyrocket every month.

Paying Installments for a Phone

Save up for a new phone and buy it all at once. Paying monthly installments for a new phone is more convenient for many people, but you end up paying more for the phone. How? Many carriers will charge an “access” fee on your bill when you’re making your payments. Those fees add up and cause you to spend more on the smartphone than you would have if you’d bought it in one go.

Plus, sometimes people don’t realize that they’ve finished paying for their phones, yet their phone bill doesn’t actually go down. Don’t continue to pay for a phone that’s already paid off or allow your carrier to stick you with another charge once that debt is paid to keep the bill at the same amount.

Plan Includes Unnecessary Minutes

Are you paying for phone call minutes? How often do you talk on the phone? You probably don’t need as many minutes as you’re paying for. In many cases, you can switch the minutes in your plan for unlimited texts or unlimited data. Keep a low number of minutes for the times when you have to make appointments or call work. Ditch the rest. If you have a weekly phone call with a friend or family member, switch it to a free video chat service like Skype, Google Hangouts, or What’s App.

Phone Insurance

broken phone

Image via Flickr by rafael-castillo

The concept of smartphone insurance is a fantastic one: Add a bit to your bill and be protected if anything happens to your phone. Unfortunately, the reality is rarely as good as the dream. Time’s Money.com reports that because of deductibles, bad options for replacement phones, and other issues, smartphone insurance doesn’t offer the coverage you need to justify the added expense.

Your best bet? Get a quality case and screen protector to protect against accidental drops or falls. If your phone is less than one year old, check to see if the manufacturer offers a warranty. You don’t need insurance for many types of issues when your phone is under warranty; just be sure to read what is and is not covered.

Lots of carriers offer monthly smartphone plan options that have the features you need without charging you for the ones you don’t. Instead of sticking with the carrier you’ve always had, shop around a bit and discover what other options are out there.

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