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Brian’s note – this is a timely post as I just purchased a new Nexus 5 from Google. After running the numbers, I’m buying my own device, switching to a discount carrier and saving over $600 over a 2 year term!
When you sign up for a standard cell phone contract, you probably compare rates carefully to find a monthly plan that fits into your budget. Unfortunately, your wireless carrier may not be the only one you’re paying when you receive your bill. Extra taxes, service fees, and surcharges can raise your bill each month. Although the difference may be slight from month to month, over the course of a year it can add up to a significant amount. For example, the average American cell phone customer pays an additional 17.2% on their bill, according to the Tax Foundation. This includes charges for everything from state taxes to 911 systems. To create a more accurate budget, it’s important to learn how to spot these hidden fees and uncover which can be reduced.
Wireless Taxes
One of the most prevalent types of fees is a wireless tax, which may get tacked on to the end of your wireless bill each month. If you agree to a monthly payment of $60 in your contract, you may be paying something closer to $70 due to state and federal wireless taxes. These can vary from state to state and country to country, so it’s best to research what the tax rates are in your location to fit them into your budget.
Subscription Services
It’s difficult to avoid taxes, but another type of hidden fee that is entirely avoidable is the cost of unwanted subscription services. Many consumers sign up for premium texting services without realising it, either through texting a special number for your horoscope or participating in a game show. If you enter your cell phone number anywhere online to participate in a survey or giveaway, this could also lead to you being unwittingly signed up for premium texting services. These will appear as tiny charges each month, so you may not even notice them at first. Yet even if you are paying $5 extra each month, this will add up to $60 over the course of a year that you don’t want to pay. It’s important to go over your phone bill carefully each month and call your provider if you are curious about mysterious fees. You can also usually text “STOP” to any unknown numbers sending you unsolicited messages.
Roaming Charges
There’s a multitude of free, useful apps on the market which can be used for business or just for fun. Yet when smartphone apps are left in active mode, they keep pushing content to the phone even when you’re not actively using it. This can result in extra data and roaming charges, and can be particularly costly if you go on holiday overseas. It’s best to work over Wi-Fi whenever possible to avoid these charges, or use mobile internet with Lebara to pay for overseas minutes in advance. This allows you to leave you phone at home and avoid excess data use abroad.
There are a number of ways to reduce your phone bills, but one of the most important is to be vigilant and take the time to look at your bill closely. If there are any charges you don’t understand, don’t hesitate to call your provider for an explanation. Many fees are negotiable, so it never hurts to ask for a discount. Further ways to reduce charges include using special SIM card deals with Lebara when dialling abroad, and shop around for the best mobile rates when the time comes to renew or switch contracts.
