Find the Most Affordable Cell Phone Plans and Deals

smartphone taking pic of flowers

When it comes to purchasing a phone, you’re presented with a surfeit of options: smartphone or classic? Pay-as-you-go or binding contract? How much data do you need? We’ll help you decide whether you’re paying too much for your phone or data plan, and give tips on how to lower your bills.

Are you paying too much for your current contract?

The first step is to decide whether you’re wasting money on your current contract, and figure out how to negotiate a better one. Ask yourself the following questions based on your most recent statement:

  • How many weekday minutes, night and weekend minutes did I use?
  • How many texts did I send and receive?
  • Are most of my calls to a small number of people that can be enrolled in a family plan?
  • How much data did I use? Did I access the Web mostly over wifi or through my cellular network?
  • Is this usage reasonable compared to what my plan allows for? Am I paying for way more than I use?
  • Can I cut down on my data usage by doing the heavy lifting – downloading and streaming – over wifi instead of using the cell network?

A site like MyRatePlan can analyze your phone usage and recommend better plans; it customizes its recommendations based on your usage.

5 ways to cut costs

  1. Use wifi hotspots. Unless you have an unlimited data plan (which can be quite pricey), using a phone’s network to stream cat videos will eat up your allotted usage. In order to avoid expensive over-the-limit rates, connect to a public, home or work wifi network for your data-intensive downloads and streaming.
  2. Use apps when possible – especially internationally. Calling an international number from the US can be extremely expensive. Google Voice, Skype and Vonage are all low-cost options for international phone calls. Many of these services make domestic computer-to-phone calls for free as well.
  3. Use a free call-and-text app. For example, Yuliop offers free texts and calls in the US, even if the other person doesn’t have the app. When it comes to services like this, you’re often better off with a dark horse than with a name-brand like AT&T.
  4. Consider a third party for cell phone insurance. Though your provider probably offers insurance, other services might very well come cheaper. One such company, SquareTrade, offers a monthly smartphone insurance plan for $7.

Contract over? Time to negotiate

Even if you like your current provider and plan to stick with them after your contract expires, don’t let an opportunity go to waste: you can negotiate your way to a better deal by threatening to leave. Shop around for different rates, and then call up your current provider to ask them to beat the lowest rate you’ve been offered. Tell them that while you’d like to stay, you’re going to need a plan that beats the lowest offer.

Also, consider unlocking your cell phone (with your provider’s permission; it’s illegal to do so otherwise). This will let you move freely between similar providers without having to buy a brand-new phone.

Tips on getting the cheapest phone and contracts

  • Trade in your old phone. Services like Gazelle or Amazon will buy your old cell phones, helping to defray the cost of a new one.
  • Beware of “free” phones. If you’re offered a cell phone plan that comes with a “free” phone, know that the cost is actually priced into the contract. You’re basically taking out a loan, where you get the phone upfront and pay it off in monthly installments over the life of your contract. This means that a contract with no phone will have lower monthly rates than a contract with a free or subsidized phone.
  • Consider a pay-as-you-go plan for limited use. If you or a relative uses a cell phone infrequently (or if you’re traveling and want to avoid roaming charges), consider a pay-as-you-go plan designed for light users.
  • Check to make sure you’ll get service. Every cell phone provider has a “coverage map” on their website. Put your address in to make sure that the service you want is actually available, and strong, in your area. You should also do a search for “[cell phone provider] coverage in [your area]” – consumers know best.
  • When it comes time to buy, use rewards malls and cashback websites. Though AT&T, Verizon and the like often have discounts, cashback sites and rewards malls can sweeten the deal. Use a coupon website to find the best malls for the provider you’ve chosen, then click through from that website to the provider’s site to earn 5% or more off your purchase.
  • Consider the Lifeline program. If you earn less than 135% of the poverty level, you may be eligible for the Lifeline program, which provides low-cost cell phone plans to low-income consumers.

What are the best ways to save money on cell phones and contracts? See our readers’ best answers and join in the discussion on the NerdWallet Forum.

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