6 Secrets of Cell Phone Carriers

Chances are your provider keeps you in the dark about these money-saving tips.

By SHARE

Raise your hand if you hate your cell phone carrier. If your hand is in the air, you’re not alone. From long term contracts to expensive data plans to early termination fees, our cell phones plans and service can be extremely frustrating and costly. A recent Consumer Reports study ranked customer satisfaction among cell phone carriers with mixed results. And with the current financial climate in mind, it’s more important than ever to get the most bang for our buck when it comes to cell phones.

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The key to unlocking savings is knowledge. We need to know what the cell phone carriers know in order to negotiate fair deals and avoid spending money unnecessarily. By having a few pieces of valuable information, we can level the playing field. So here are six secrets cell phone carriers don’t want you to know.

Don’t buy that app

Carriers today sell a variety of smartphone applications that you can get elsewhere for free. A good example of this is a navigation program that uses your phones GPS to give you turn-by-turn directions. While the carriers charge for navigational apps, there are a number of third-party navigation apps that are free. As a result, we are now seeing carriers reduce the price of these programs. Verizon use to charge $9.99 per month for its VZ Navigator, but recently dropped the price to $5 so it can better compete with the free apps that provide the same services.

Carriers also have their own programs for downloading music and ring tones to your device. With all the better options available now, like iTunes, the only way carriers can retain their customers is to lower prices. However, until carriers start offering free programs, it is cheaper to use a third-party app.

You can negotiate

When it comes to cell phones and cell phone plans, it’s common to feel like we are at the mercy of the carrier we choose. In reality, you have more bargaining power than you think. You might be surprised to hear that you can negotiate the cost of a new cell phone and even the perks of your calling plan.

There are two best-case scenarios in order to get the carrier to be more flexible with you: 1) if you are a new customer, and 2) if you are out of contract. Carriers love new customers and will do just about anything to get their business. For example, in some cases a carrier will cover the cost for you to break the contract with your current carrier. The more lines of service you have, the more valuable you are to them. If you are already a customer and out of contract, your negotiation power increases substantially. To keep you as a customer they will reduce the price of a phone, add a one-time credit to your account, and even provide your account with bonus minutes free of charge.

Ways around a contract

Cell phone companies generally require their customers to enter into a one or two year contract. If you break the contract early, you must pay the dreaded early termination fee. If you don’t want to be locked into a long-term contract, you do have some options. First, you can purchase a prepaid cell phone plan. Smartphones are available with prepaid plans, and you pay month-to-month as long as you want the service.

Apart from prepaid plans, cell phone companies lock you into a contract in exchange for giving you a substantial discount on a phone. Most companies offer a one-year contract price on a new phone and a two-year contract price. If you go for the two-year contract, then the phone is less expensive. There are two ways you can avoid this all together. The first is to pay full price for the phone. Phones are not cheap, which means paying full price could be a lot more than you want to pay.

If you don’t want to cough up several hundred dollars for a new phone, then try buying a phone from Craigslist, EBay or from a friend. As long as the phone has not been reported lost or stolen, you can activate a used phone on your line. You do need to ensure that the phone works with your carrier. And the phone also has to be E911 compatible, which enables 911 emergency services to locate the phone if needed.

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Charge it

If you use a cash-back credit card or other rewards card, you can automate the payment of your monthly cell phone bill. The charges are automatically added to your card each month, and you earn the points, miles, or cash offered by your card. This payment method costs the cell phone carrier more, as they have to pay the interchange fees associated with credits. But it’s a convenient way to pay your bill and rack up some credit card rewards at the same time.

Get out of your contract

There are a few instances when you can get out of your contract early and not be charged an early termination fee. One instance is if you move to an area where your current carrier does not provide service. For example, if you are living in the coverage area of your provider and then move to an area where they can’t provide service for you anymore, they will let you out of your contract. Carriers will also allow you to cancel service early in the event the account holder or one of the users on the account dies. While this is not exactly a desired outcome, it’s good to know if you are handling the estate of loved one.

Improve your plan

This final secret can save you a bundle. Did you ever wonder if you were paying for a more expensive cell phone plan than what you needed? Trying to decipher the available plans and your cell phone usage can seem more complicated than sending the shuttle into orbit. Fortunately, there is a low-cost service that will do the heavy lifting. It’s called Validas.

With Validas, you can upload your cell phone bill, and the site will crunch the numbers and tell you if a less expensive plan will meet your needs. There is a cost of $4.99 for consumers to evaluate up to five lines, but you get to see your savings before deciding whether to buy the service.

DR is the founder of the popular personal finance blog, the Dough Roller and credit card review site, Credit Card Offers IQ.