Zap Cell Phone and Land Line Fees
Of all the fees that cell-phone companies can sting you with, high "overage" charges often smart the most.
Of all the fees that cell-phone companies can sting you with, high "overage" charges often smart the most. The hefty penalty for using more minutes in a month than allotted by your plan ranges from 5 cents to 45 cents per minute.
In 2006, shortly after finishing graduate school at Stanford, Prashanth Ranganathan got slapped with a $246 overage fee. Incensed, Ranganathan, 29, built a computer program that monitors his cell-phone usage on his desktop.
Row 0 - Cell 0 | SLIDE SHOW: Save $5363 a Year |
Row 1 - Cell 0 | How We Beat the Fees |
Row 0 - Cell 0 | SLIDE SHOW: Pesky Fees We Can't Stand |
Row 1 - Cell 0 | Share Your Most Annoying Fees |
The program automatically tracks his minutes by linking to his account via his cell-phone provider's Web site. With his friend Aniq Rahman, Ranganathan created a Web site called Watchmycell.com. So far, more than 13,000 people have downloaded the free tool. You can also monitor your cell-phone usage by logging in to your account on your provider's Web site.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Text messages -- the bane of many a parent's existence -- can cost up to 20 cents per message to send or receive. So you (or your kids) can save by buying in bulk. T-Mobile offers 400 text messages a month for $4.99; AT&T charges $5 for 200 messages.
Switching to a cheaper plan and canceling a one- or two-year contract triggers an early-termination fee that can run as high as $200. To avoid that pain, try to transfer your service contract to someone else. For a fee of $18 to $25, Web sites such as Celltradeusa.com and Cellswapper.com help match buyers and sellers (see "Lowdown," March).
Avoid overage charges and cancellation fees altogether by purchasing prepaid service from companies such as T-Mobile, AT&T's GoPhone or Virgin Mobile. Customers can cancel their service with no penalty, and monthly rates are competitive.
For cell-phone users, the most objectionable fees -- and often the most difficult to decipher -- aren't strictly fees at all but the federal, state and local taxes that can add a staggering 6% to 23% to your monthly bill, depending on where you live (the national average is 15%). You can fight charges like these at the ballot box (sign up for legislative alerts at MyWireless.org).
At the same time, carriers pass along fees that look like taxes but aren't -- a notable example being the Universal Service Fund fee, which carriers are required to pay to promote affordable phone service. The charge varies among companies.
You can't escape fees by using a land line. Verizon, for example, charges a "dial tone" fee of $6 to $12 per month, depending on your state, to subscribers who buy basic service.
Bundling your phone with other services -- cell-phone, cable-TV and Internet-access -- can result in big savings. Or you could abandon traditional carriers altogether in favor of Internet calling services that use Voice over Internet Protocol, or VoIP, such as Vonage and AT&T CallVantage. Rates generally run about $20 per month for local calls and $25 per month for both local and long-distance service. But VoIP providers still pass along regulatory fees and charges that will add 10% to 15% to your monthly rate.
The only way to escape the extra burden is to drop your land line altogether, or go with a VoIP provider, such as Skype, that offers free service when the call is routed from one computer to another and both parties use Skype software.
NEXT: Avoid Car Rental and Purchase Fees
Reduce Bank and Credit Card Fees
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
Stock Market Today: Stocks Rally Despite Rising Geopolitical Tension
The main indexes were mixed on Tuesday but closed well off their lows after an early flight to safety.
By David Dittman Published
-
What's at Stake for Alphabet as DOJ Eyes Google's Chrome
Alphabet is higher Tuesday even as antitrust officials at the DOJ support forcing Google to sell its popular web browser. Here's what you need to know.
By Joey Solitro Published
-
Roth IRA Contribution Limits for 2024 and 2025
Roth IRAs Roth IRA contribution limits have gone up. Here's what you need to know.
By Jackie Stewart Last updated
-
Four Tips for Renting Out Your Home on Airbnb
real estate Here's what you should know before listing your home on Airbnb.
By Miriam Cross Published
-
Five Ways to a Cheap Last-Minute Vacation
Travel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
By Vaishali Varu Last updated
-
How to Figure Out How Much Life Insurance You Need
insurance Instead of relying on rules of thumb, you’re better off taking a systematic approach to figuring your life insurance needs.
By Kimberly Lankford Last updated
-
Five Reasons You Shouldn't Shop on Amazon Prime Day
Smart Buying Think twice before getting lured into buying a bunch of stuff you don't need just because it's on sale.
By Andrea Browne Taylor Last updated
-
Amazon Big Deal Days Is Coming! We’ve Got All the Details
Amazon Prime To kick off the holiday season with a bang, Amazon Big Deal Days runs Tuesday, October 8 and Wednesday, October 9.
By Bob Niedt Last updated
-
How to Shop for Life Insurance in 3 Easy Steps
insurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
By Kaitlin Pitsker Published
-
Five Ways to Shop for a Low Mortgage Rate
Becoming a Homeowner Mortgage rates are high this year, but you can still find an affordable loan with these tips.
By Daniel Bortz Last updated