This is the latest in our series of how to reduce your cell phone bill.

Do you call internationally (from the U.S.) on your cell phone?  If you are using your cell phone provider for international long distance, you probably have run up some pretty significant bills.  For example, calling France on AT&T is $1.49 per minute, while it is $3.49 a minute to India.  One way to cut these costs is to see if your carrier has a monthly feature that offers reduced rates.  AT&T has “World Connect” which, for $3.99/month, shaves quite a bit off these rates.   Similarly priced programs are available with Verizon and Sprint.  T-Mobile is $5/month.

To save even more, try a carrier bypass service.   We work with a company called Enjoy Prepaid that has made the process rather simple.    Basically, you purchase a calling card with some value on it (e.g., $20) and register it.   Since it is registered, you won’t need to dial a PIN.  There’s an access number you call, but that can be set up as a speed dial on your phone, meaning you only need to dial the phone number… just as if you were dialing directly.    Call a landline in France or India for just a couple pennies a minute.  (Calls to cell phones in foreign countries, whether with a calling card or directly with your carrier are usually at higher rates.)

If you want to try out Enjoy Prepaid or just check out the rates to where you call, click here.   Use coupon code FRW15-943201586 by July 4 for 10% off your order.

A few other things to keep in mind as you consider your international long distance options

1. Even if you make just one 3 minute international call a month, you’ll be better off with either of the two options above
2. Enjoy Prepaid (and similar prepaid programs) are generally cheaper than even the discounted carrier rates.  However, you should compare rates for the places you call the most.  Make sure you compare the cost to both landline and wireless calls in those countries.
3. The carrier wireless program fees are charged monthly, so if you don’t plan on making international calls for a while, remember to have the plan changed on your account or you’ll pay a monthly fee for no reason
4. Enjoy Prepaid offers a number of different card programs.  The lowest rates tend to round calls up by a couple minutes and may have a small weekly fee.    In general, if you make short phone calls or make international calls infrequently, you should opt for the card with the least rounding and no fees.  The longer your calls, and the more frequent, the more beneficial it will be to take the lower per minute rates.

This is the fourth in a series of how to cut your cell phone bill.

It wasn’t that long ago that prepaid was an afterthought in the cell phone marketplace.  High rates and limited phone selection kept interest in prepaid limited to those whose credit didn’t allow them to get a cell phone contract.

A number of things changed in recent years.  First, cell phone carriers started requiring two-year contracts for most subscribers, vs. the one-year norm that had been in place.   This likely served to make more people at least aware of the prepaid alternative.     Second, the emergence of companies like Virgin Mobile USA and Boost whose marketing efforts pushed no-contract into a teenage market that had mostly been ignored by the major carriers.   Third, prepaid pricing began to fall and  ”pay monthly” plans arrived, with a structure that looked like contract plans, but without the contract.   Finally, led by expanding regional no-contract carriers like Cricket and MetroPCS that offered unlimited service for a flat fee, the national prepaid providers began offering monthly pricing at a level that was actually below that of the major carriers.  For a time, carriers like AT&T and Verizon had rates 100% higher than some of these no-contract carriers were offering.

Whether prepaid service makes sense for you depends on a number of things.   From a rate perspective, very light and very heavy users of wireless can save; it is less clear-cut for those using a moderate amount each month.

• Light Users:     Pay-as-you-Go prepaid can minimize your monthly cost, even though the per-minute rate might be higher than in a contract plan.  Consider a 100 minute per month user.     A 10 cent per minute prepaid plan would cost $10/month vs. a $40 per month minimum with carriers like AT&T and Verizon.   For those looking at this option, keep in mind that airtime cards have expiration periods that effectively put a floor on how little you can spend each month.
• Heavy Users:   Several carriers offer unlimited no contract voice service for $50 a month.  Straight Talk offers unlimited voice, text and data for just $45.   T-Mobile comes closest to this at $60 for unlimited voice, while AT&T and Verizon are at $70.

To see if you can save money with prepaid, use our CellCalc rate plan comparison tool.  It will recommend specific plans based on your usage and the features you want in your plan.   However, even if you can save money with prepaid, there are other reasons why you still might choose a contract plan.

• You’ll pay full price for the phone. This can be very little or can be several hundred dollars for a smartphone (see next bullet).   When you get a contract plan, the price of the phone is heavily subsidized by the carrier.   The future of cell phone pricing can be seen with what T-Mobile does:   They have a series of contract and no-contract plans, where the no-contract ones are $10 cheaper per month but require customers to pay full price for the phone.   Basically, you can pay up-front for the phone or effectively pay some each month for it.
• Phone selection is limited. This is just starting to change, and will mostly disappear in the next couple years. For now, however, most smartphones and other higher end phones are not available with prepaid.   In addition, most carriers don’t offer phones with 3G access.  As a result, those who want to use the phone for data are going to have an inferior experience in many cases with prepaid.

We’ll preface this tip with an example.     Let’s say you wanted to sign up for a 2 line AT&T family plan today. Specifically, you are going to get the AT&T Family Talk 700 plan ($69.99/month).with a BlackBerry Bold 9700 for each line.     Before you buy, you decide to check the price from 3 websites:   AT&T, BestBuy and MyRatePlan.  Here’s what you would see for the cost of two phones:

• AT&T:                 $399.98
• Best Buy             $199.98
• MyRatePlan        $0.00

Prices checked 5/17/2010

That’s right, just based on where you bought, you could spend up to an extra $400 (enough to pay for more than 5 months of service on the $69.99 family plan) at the outset, for the exact same phones and rate plan.    Here are some more examples (all for a single line of service).

The point is not that we have the low price (we don’t even sell the phones ourselves– just try and point visitors to our site to a low online price), but that there can be a tremendous difference in price across retailers.  Furthermore:

• The hierarchy of pricing shown above tends to hold across devices:   online 3rd party retailer is cheaper than 3rd party offline retailer which is cheaper than buying directly from the carrier; the carrier prices tend to be the same whether online or offline.
• Regardless of where you buy, the rate plans (e.g., the 700 minute family plan) are the same, because those are determined by the carrier
• Signing up for service from a 3rd party is essentially the same as buying directly from the carrier:  there is a phone component and a plan component.    When you don’t buy directly from the carrier, the best way to think about it is that the retailer is selling you a phone at a discount in exchange for getting you to subscribe to one of the carrier’s authorized plans.  The carrier then pays the retailer a commission.  If the retailer wants to make a profit, that commission needs to more than cover the discount given to you plus their overhead.
• Since online selling is impersonal (i.e., no salesperson), the only real differentiator between websites is the price of the phone.   Online only companies tend to have lower overhead, as well.  These two factors combine to make online the best place to get the best price on a new phone.
• The biggest price discrepancies occur for phones purchased with a rate plan (either new service or a contract renewal).   There are price differentials across retailers for ‘phone only’ upgrades, but the differences are much smaller since there are no carrier commissions:  The retailer will only make a profit if they sell the phone for higher than its cost.

To compare phones and see some low online prices, use our interactive phonefinder.

The cell phone companies make directory assistance almost effortless…dial 411… get the information… and get connected automatically.   Of course, if someone paid you $1.79 (Sprint, T-Mobile) or $1.99 (AT&T, Verizon) for each 411 call, you’d make it easy for them to connect as well.

Directory assistance charges can really add up:  10 calls a month comes out to over $200 a year.

There is a free* directory assistance alternative from Google.  Just dial 800-GOOG411 ( 800-466-4411) from your cell phone.    The service is voice-activated and can help you find the business you choose (it doesn’t do residential numbers at the present time).    In addition to a voice reply, the service can send you a text message with more details and a map.

A related free* information service is also available from Google.  Just text 466453 from your cell phone with a request for information –  movies, sports scores, weather, business names and more.

There may be some situations where your cell phone company’s 411 service makes sense to use, but these free services can be just as good in many cases and can save you a considerable amount of money if you use them frequently.

*  Charges apply as they would in any regular cell phone call or text, but your bill will only go up if you go over your plan allowance of minutes or messages.

Cut your data and text messaging bills.    This is the first in a series of suggestions to help you reduce your cell phone bill.

Five big picture trends are behind the recent carrier push to get more people to subscribe to text and data plans:

• The price of voice calls continues to drop:   Unlimited plans for most carriers are $70 or less, with the $40 plan now containing enough free minutes to satisfy most people’s needs
• Almost everyone has a cell phone, so growth rates are slowing
• Carriers have invested billions in 3G (and coming 4G) data networks, and want to recoup that cost
• It is an easier sell, as many phones have full QWERTY keyboards, large display screens and better web browsing experiences
• These more sophisticated phones now cost the carriers more to purchase, increasing the up-front cost to acquire new customers

As a result, the carriers need to rely more heavily on non-voice services to achieve their goal — a higher revenue per subscriber.   Of course, this is the opposite of our goal as consumers — we want to pay our cell phone carrier as little as possible each month.

Until recently, the cell phone and plan component of a subscription were pretty independent.  Now, however, carriers have segmented phones into three types: Feature, Multimedia/Messaging, and Smartphone, and have instituted some minimum plan requirements based on the type:      The 4 large national carriers all require a data package (around $30) in the rate plan if you want to buy and activate a smartphone.    For multimedia/messaging phones, Verizon requires a $9.99 data package while AT&T requires a minimum of $20 in data and/or text add-ons.

With that background, a few informational comments and tips.

• Bundle text messaging: With carriers charging $0.20 each way for casual messaging, the bill can quickly add up.  For example, just 4 a day will cause you to spend over $200 extra per year.  In most cases, even one text a day is enough ask your carrier about bundles.   However, if you are only a moderate user of messaging, don’t immediately go for the unlimited bundle, as that might be a waste of money as well.   Use our text messaging optimizer to figure out what bundle you should have.
• Family texting: On family plans, each line can have its own text plan, so worth evaluating individually
• Smartphone vs. multimedia phone: If you are thinking of getting a smartphone, but most of your non-voice activity is text messaging, it might be more economical to get one of the quick messaging phones that have a physical full QWERTY keyboard.  You’ll save the $30/month smartphone data fee.  Keep in mind the minimum charges by AT&T and Verizon on these phone types, however when you are making the comparison.
• Smartphone termination fees: Verizon has doubled the termination fee on smartphones (and a few multimedia devices) to $350, although this declines by $10/month as the contract goes on.
• Estimate your monthly bill: Our CellCalc^TM rate plan comparison tool takes many of the above issues into account, making it easy to find the plan that minimizes your monthly costs.
• The lowest monthly price:    The phones are expensive (relative to contract plans) and the selection isn’t as good, but a service called Straight Talk (available online and at Wal-Mart) offers unlimited voice, text, data and directory assistance for just $45/month.

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