Cell Phones, Texting, Data Plans and More Bells and Whistles

publication date: Jan 6, 2016

Cell phones can be a highly useful tool for staying in touch, especially when you're on the go. With the increasing functionality and power, today's cell phones are similar to carrying around a small, hand-held computer.

That said, some people, including families with children as well as business owners, must take care to avoid running up large monthly bills that ruin folk's budgets. Take the recent experience of teenager Ashton Feingold, who ran up a $2,000 monthly bill on his iPhone. The culprit: His new iPhone's "WiFi Assist" feature which automatically switches the users cell phone off of an available WiFi network if the signal is deemed weak and onto the carrier's cellular data network. So, for example, when Ashton thought he was using his home's "free" WiFi network during many hours spent at home on his phone, he was instead often switched to using the pay as you go cellular data network on his family's cell phone plan.

While perhaps a bit extreme, the Feingold's experience of spending much more than they thought that they would and wanted to is not unusual and highlights the need to manage all the bells and whistles that come on cell phones and associated plans. I have written about this all before and warned and advised folks to proactively manage the features and potential costs you may be facing. But, technology, phones and plans continue to rapidly evolve. Consumer Reports is out with a recent report on your options so I thought the time was right to update you in this area. Below are the highlights of Consumer's recent study followed by my comments:      

Consumer Reports

According to a recent survey by Cowen and Company, a financial services firm, the average customer of one of the Big Four cellular providers (AT&T, Sprint, T-Mobile, and Verizon Wireless) spends more than $90 per month for individual service—and the figure is $111 for iPhone owners...

If that seems like too much to spend on mobile bills, it is. Our own survey data and industry-wide analysis of smart-phone plans confirm that customers who are still hanging on to traditional two-year mobile phone contracts are getting rooked.

The good news is that the cellular-service industry has changed in the past two years. Big providers are offering new plans that decouple the cost of monthly service from the cost of the handset, and they are competing to steal each other’s customers. Meanwhile, smaller providers are pioneering new ways to keep costs down—and winning fans as they do it. Three of the upstart providers—Ting, Consumer Cellular, and Republic Wireless—recently earned top Ratings (see graphic below) in the Consumer Reports National Research Center’s annual survey on cell providers...

If your monthly bills are draining your patience along with your bank account, we have solutions. And if you're thinking of upgrading your phone, find out why it's the right time to buy a new phone...

1. Drop the contract. In the current wireless market, the worst buying decision you can make is to lock yourself into a multiyear contract...But what if you’re trapped in a bad contract with a high termination fee? The first thing to do is investigate your own provider’s lower-cost alternatives—simply go online and see what changes you can make without incurring extra charges. If you want to switch providers, you may be able to get a new carrier to buy out the remainder of your contract. In the fall, Sprint and T-Mobile offered several hundred dollars per line to consumers who brought a phone and switched from another carrier. And in December, Sprint started halving the monthly rate for customers defecting from AT&T or Verizon.

2. Add up your data needs. Once you’ve freed yourself from your contract, it’s time to find a better deal. Start by calculating the data requirement for each of your devices. (These days, plans focus on data more than voice. Say bye-bye to unlimited data plans and hello to dirt-cheap voice minutes and texts.) Look at your old bills, consult your carrier’s data calculator, or use a data-measuring app such as My Data Manager to figure out how much data you’re using. Most people can get by with 1GB to 2GB per month, especially if they make ample use of Wi-Fi connections. If someone in your family travels a lot and is frequently away from a Wi-Fi connection, figure on 4GB to 5GB monthly for that phone.

3. Shop the big players. Although smaller carriers may seem to have the edge on the big guys for value, there are some good reasons to stay with the big carriers. In our survey, Verizon Wireless earned decent marks across the board for voice, text, Web, and 4G reliability, and AT&T was a standout for 4G service. T-Mobile, on top of offering the best prices among the big carriers, ranked high for resolving issues promptly and for staff knowledge. T-Mobile, Verizon, and AT&T all earned very good marks for staff courtesy. (Sprint, by contrast, scores poorly on most measures.) If a fast, reliable data network and a well-oiled customer-­service operation are your priorities, bigger may be better. The quick-and-dirty guide: You’ll probably find lower prices on T-Mobile, better across-the-board service on Verizon, and really great 4G data access—very big with power smart-phone users—on AT&T.

4. Or go small. The happiest customers in our survey were those using less popular services, such as Consumer Cellular, Net10, Republic Wireless, Straight Talk, TracFone, Ting, and Virgin Mobile. People like the carriers for their low prices, and several of the companies also scored very well for service...The small carriers use varied approaches to pricing, and there are some complexities to master. While Consumer Cellular charges a flat fee each month, Ting offers what’s known as a pay-as-you go plan. You pay a barely-there access fee of $6 per phone line and cheap additional rates such as $9 for 500 minutes of calls and $19 for 1GB of data. The bills vary with how many minutes and megabytes you actually use—you could end up paying even less.

My Comments

It pays to pay attention and to shop around. Years ago, I used Verizon for my family's cell phone services. But, over time, my teenagers started using more features like texting and data and the costs under Verizon's plans at that time were way too costly in my opinion so I shopped around. Their coverage network was pretty good so I wasn't going to switch without comparing that aspect as well as overall service.

I ended up switching to one of the small carriers and have been quite happy with the excellent value I get now. For just over $100 per month, I get all the services I need for a family of five! I could easily be paying double to triple that amount through other providers.

For many years in my writing, I have been advocating managing all expenses, including cell phone expenses. And, I continue to strongly advise doing this with kids. A cell phone with all the bells and whistles is hardly a necessity. I know plenty of families that don't consider getting their kids their own cell phones until they reach high school and would never spend hundreds of dollars on costly premium cell phones like an iPhone. Hey, if you want to drop $600 on iPhone and you can truly afford to do so, who I am I to say don't do that!  

As the earlier article that I cited highlighted, data usage on these cell plans can lead to unexpectedly large bills. The simple solution is to do your heavy data usage activities -  video watching and uploading, listening to streamed music, and online game playing - on your personal computer not your cell phone! Alternatively, you could do such activities on your cell phone when you have access to Wi-Fi. (If you have kids who don't abide by your rules, know that some providers even allow you to shut-off data services on selected cell phones for whatever period of time you desire.) 

ratings key
ProviderSurvey results
TRADITIONAL SERVICE: Billed at month's end, often under a contractReader score
overall score
Web problems
Support: Phone
Support: Staff knowledge
Support: Staff courtesy
Consumer Cellular
- - -
Credo Mobile
Virgin Mobile
U.S. Cellular
Verizon Wireless
PREPAID SERVICE: Billed in advance, without a contractoverall score
Republic Wireless
- - -
Page Plus Cellular
Straight Talk
- - -
Virgin Mobile
Boost Mobile
- - -
Verizon Wireless

Guide to the Ratings

Ratings are based on 89,829 Consumer Reports subscribers who completed the 2015 Annual Summer Survey in July/August and had traditional or prepaid cell phone service.  Traditional customers said they receive a bill after each month of service; prepaid customers said they pre-pay for service as needed.  While some providers may offer one or both types of service, only providers for which we had sufficient data of the specified type are included in the table. Reader score refers to how respondents rated their overall satisfaction with their cell phone service and is not limited to the factors listed under survey results.  A score of 100 means all respondents were completely satisfied; 80 would mean very satisfied, on average; 60, fairly well satisfied.  Differences in reader scores of less than 5 points are not meaningful.  The following ratings are based on the average frequency of problems in the past week, are adjusted for frequency of use, and are relative (reflecting differences from the average of all providers in all areas):  voice (no service, static), text (difficulty sending/receiving messages, delays), and web (slow, interrupted, or unavailable).  The following blobs reflect mean scores on a scale of "Very poor" to "Excellent":  value for money, experience with data service, ease and speed of reaching support staff through the phone system, and support staff knowledge and courtesy.  Findings reflect experiences of our readers, not necessarily those of the general US population. ‘--' indicates insufficient data.

Bookmark and Share

Copyright Eric Tyson, 2008 - 2018 all rights reserved.

Eric Tyson is the only best-selling personal finance author who has an extensive background as an hourly-based financial advisor and who does not accept speaking fees, endorsement deals or fees of any type from companies in the financial services industry or product or service providers recommended in his articles, books and his publications.




Search EricTyson.com
Listen to Eric's Song

Paul Shaffer (below left) and his David Letterman Band recorded Eric's song which was written by Rock & Roll Hall of Fame song writer Jake Holmes.

This song made possible by Eric's donation to