By Mary Hunt
We've all been there: You sign up for a phone plan, cable package or Internet service thinking you're getting a rock-bottom price. Then the bill shows up filled with mysterious charges and an eye-popping sum. It's enough to make you pull out your hair! But before you yank the plug on the service (not to mention your hair), take these steps to get back in control.
Get reviewed. The plan you chose at the beginning of your contract may be totally wrong for you now: You may not use all the minutes you have or you may need to send more text messages than you're allowed. Thankfully, you're not stuck with your plan. Call your provider's customer service department and ask a rep to review your usage and recommend changes that will lower your costs, or visit the provider's website and do an assessment on your own. "Our goal is to make sure customers get the service that meets their needs," says Bill Kula, spokesman for Verizon. "We're happy to allow a customer under contract to downgrade midstream to a less costly plan."
Pick minutes wisely. According to the FCC, 1 in 6 U.S. mobile-phone customers have received unexpected cell phone charges- some of $100 or more-and their mobile carrier did not contact them when they were about to exceed their allotted minutes, text messages or data downloads. Carriers aren't obligated to contact you when you're about to go over, so it's up to you to monitor your usage. To be safe, when choosing a calling plan, buy 10 to 15 percent more minutes than you think you need, says Allan Keiter, president of MyRatePlan.com, a website that helps consumers make informed purchase decisions about household services. "This will act as insurance against going over your minutes and spending more."
Plan your texting. Some plans charge as much as 25¢ per text-and that applies to messages you send as well as those you receive. Even if you don't text much, your teen probably does: American teens each send a mind-boggling 2,779 text messages per month, according to The Nielsen Company. The best thing to do is add a text-messaging bundle to your calling plan. For example, Sprint currently offers 300 text messages for $5 a month per phone, 1,000 messages for $10 or unlimited text messaging for $20. Verizon offers unlimited text messaging to other users within its network plus 500 additional messages to other carriers for $10 a month per phone, and 5,000 messages for $20 a month. Paying $100 a year or so for enough text messages is a lot cheaper than being charged $25 or more a month for going over your allotted texts.
Stick with friends. Many carriers offer free unlimited in-network calling, meaning you won't use any of your minutes when talking to people in your network. So if you use the same provider as most of your friends and family, you'll save by buying a calling plan with fewer minutes.
Use alternatives. Instead of using up your cell plan minutes while at home, sign up with a free service like Skype, which allows you to make video and voice calls from your computer. Both parties can sign up for Skype for free, though if your computer doesn't have a built-in camera, microphone and speakers, you'll need to buy them for around $40. Or use Google Voice, which allows you to call or text anywhere in the U.S. for free, using your computer's speakers and keyboard.
Consider prepaid phones. A prepaid plan allows you to pay up front, with no contracts, no credit check and no monthly bills. You buy a prepaid plan phone (TracFone offers a nice selection from $9.99 to $29.99; TracFone.com) and minutes at the same time. (Minutes usually cost 5¢ to 25¢ each.) As you talk and text, you can see on your phone's screen how much time you have left. When time runs out, the phone stops working. If you're a light cell phone user (300 or fewer minutes monthly), a prepaid plan could significantly lower your costs, says Keiter: "Consider a 100-minute-permonth user. A 10¢-per-minute prepaid plan would cost $10 per month vs. the $40-per-month minimum required by the contract plans of most major providers." All of the major carriers now offer prepaid phones and airtime, so check their websites or stores. Know, however, that there are some drawbacks: Airtime minutes on a prepaid phone expire, in terms ranging from 30 days to one year, so try to buy only what you will need.
Ask an expert. With so many wireless carriers, hundreds of different phones and as many varied calling plans, it's hard to compare them and make an intelligent choice. But BillShrink and Validas do just that. With BillShrink, which is free, enter specific information about your current plan and usage, and the site recommends the plan(s) that will meet your needs for the lowest cost. Validas charges $5 for analysis, but you can upload your actual phone bill and their program will automatically do the analysis of your usage and potential savings.
Go basic. Now that nearly every home in America has at least one cell phone, almost a quarter of U.S. households have dropped their landline phones, according to a 2009 survey by the Centers for Disease Control and Prevention. The risk: When you dial 911 from a landline, emergency operators can easily pinpoint your location. So far, that hasn't been the case with cell phones, though the FCC is implementing regulations for carriers to try to improve this issue. Until it's resolved, consider cutting back your landline service to local only, including 911 and toll-free calls, and using your cell phone for long-distance calling. Most phone companies don't advertise this level of service to landline customers, but it is available for less than $20 a month.
Use phone cards. As long as you have a dial tone, even if you have only basic service, you can make long-distance calls with a prepaid phone card. Phone cards allow you to dial long distance from any phone, even your mobile, via a toll-free number on the back of the card.
Costco offers a good deal on its $19.99 Verizon 700-minute card (that's just 2.86¢ per minute for calls within the U.S., Puerto Rico and U.S. territories).
Two things to keep in mind: If you call from your cell phone, you will be charged the card's per-minute rates plus your cell phone provider's airtime charges. Also, calling from a pay phone uses up the minutes faster than calling from a traditional landline because it assesses a surcharge of about 95¢ (that's 33 minutes off your card before you've even spoken).
Go digital. Cable television providers and some other companies offer home phone service that uses broadband connections. (You use your phone the same way as always, so you won't even know the difference.) While it's not exactly the same as a landline connection in terms of getting in touch with 911 in an emergency, you can register your address with the company, which then passes on your location information to 911 operators to keep in their system.
As the competition heats up, digital phone service is getting cheaper: Companies that used to charge an average of $40 a month are now offering limited-time deals for around $20 a month, which often includes unlimited long-distance calling, call forwarding, caller ID and even voicemail. One downside: If your broadband connection goes down, so does your phone service.
E-call. If you have a broadband connection and a computer, you can use VoIP (voice over Internet protocol). Some providers to try: Skype allows you to make unlimited calls from your computer to landlines and mobile phones in the U.S. and Canada for $2.99 a month (you'll need to buy a Skype-enabled phone or a microphone and speakers if your computer doesn't have them). Another service is iCall, which uses your existing high-speed Internet connection and your PC with Windows 2000, XP or Vista to make calls; it costs $9.95 per month. Vonage lets you use your existing home phone for Internet calling via an adapter that plugs into your high-speed modem. Unlimited calling to 60 countries runs around $26 per month.
Negotiate. As with cell phone service providers, cable and satellite companies are feeling the pinch to retain customers, so this is a good time to haggle. First check around to see what the competition will offer you to switch to its service. Then call your current provider and say you're thinking about making the move unless it can beat the low offer you've received. G.E. Miller, who writes the finance blog 20SomethingFinance.com, did this recently and Comcast cut his bill by 33 percent without flinching, he says.
Take it down a notch. Do you really need 500 channels? Probably not. And you could probably do just fine without all of those premium channels. So why pay for them? Time Warner Cable Los Angeles, for example, offers cable TV with 28 basic channels for about $20 a month. By contrast, the company's top-tier digital cable package: around $100 to $120 a month.
Give it up. The WhiteFence Index, which tracks the cost of utilities in 21 U.S. cities, reports that the average household cable TV bill is currently $61 per month. That's $61 more you could have in your pocket by cutting cable. And, as archaic as it may seem, it is possible to live without pay television. I've heard from countless readers who report that getting rid of cable has changed life at home for the better because they read more books and spend more time playing outdoors. Plus, if you have a computer and high-speed Internet connection, you can watch all kinds of movie and television shows on sites like Hulu.com.
Get bundled. Bundling your landline, TV, Internet connection and cell phone into a single plan with a flat monthly rate used to require a commitment to a one- or two-year contract. But both of the major players, AT&T and Verizon, are now offering month-to-month pricing for bundles. Often the flat rate is cheaper, sometimes by hundreds of dollars, than paying separately for all your services. But you really need to do the math and see if bundling will help you save-it's a waste to pay for it if you end up not using the services to their fullest. And as with creditcard issuers who tease you with a low rate to make the switch, the companies will give you a pretty nice price for the first year or so, but then it will likely go up. If that happens, call your company and let them know you need a better rate. When Gisele Johnston of Dorchester, Ontario, was solicited by Bell to switch her services for a good rate, she asked her existing provider, Rogers, to beat the deal. And beat it, it did. "Rogers bundled all of our services, cutting the monthly bill from $180 to $112," she says. "We kept everything as it was-nothing changed but the monthly fee."
Use free connections. When the library is open, it's easy to get onto a computer for at least 15 minutes for free. If you have a laptop computer with Wi-Fi, stop into a local coffee shop or other place that offers the connection for free. At last count, according to OpenWiFiSpots.com, there were more than 64,590 free Wi-Fi hotspots in the U.S. Caution: Do not conduct any banking or personal business that you wish to keep secure. Think of anything you do on a public Internet connection as the equivalent of mailing a postcard: Assume others will read it.
Shop around for dial-up and DSL. For light users who want email, online shopping and basic Web surfing at home, the cheapest way to go is a dial-up connection. Basically, your computer uses a modem (some computers have this built in) plus your home phone line to call a local number that connects it to the Internet. A dial-up connection can be very slow, not fast enough to download movies or watch videos, and you won't be able to take calls while online. But for as little as $5 to $10 a month, depending on your location and service, you will have access to the Internet. Your current landline provider likely offers dial-up, so check there first and then shop around with providers like NetZero.com, Earthlink.net and PeoplePC.com.
DSL also operates over standard telephone lines, but is faster than dial-up (you select from four DSL speeds; 10 to 15 megabits per second is usually fast enough to download movies and watch videos). A special modem is required, which may be supplied by the provider but otherwise will run you $30 and up. Contact major DSL providers like Verizon, AT&T, Qwest, Earthlink, Speakeasy and DSLExtreme for pricing, but expect to pay $15 a month and up depending on the download speed you choose.
Look for broadband deals. Check MyRatePlan.com to find the current best deals in your zip code, then call your cable or satellite provider to inquire, or check their website. To get you to sign up, companies may slash regular rates of $40 to $50 a month to $20 or less for a period of 6 or 12 months. Before you agree, make sure you know what the total price will be after the introductory period-and for the foreseeable future.
Photos: cell phone: RK Studio/Kevin Lanthier/Getty Images; all others: ThinkstockOriginal article appeared on WomansDay.com.
Related Articles at WomansDay.com:
The Best Times to Save on Everything
10 Things You Didn't Know About Coupons
The Secrets to Online Shopping