Wednesday, May 5, 2010
Cell (mobile, in German 'handi') phones are one bill we all have in our lives that we did not have 15 years ago. It's an unfortunate necessity considering this fact. For most people though, it is a necessity and it is handy to have one in case of emergency even if you don't use it very often. I had to have one for work (tax deduction), but my wife probably would have rather gone without one. We did end up both getting them, but we took a different approach that a lot of people don't even consider.
We went the route of prepay phones.
How much do you pay for your cell every month? No, not how much is your plan, what is the total cost with taxes, surchages, etc. Let's assume it's $50 for an easy example (though, it's probably more, isn't it?). Every single month you pay that to them. Now, take that times 12 and you're looking at roughly $600 a year. That's a nice chunk of change.
How do prepay phones help with this? Two ways: One is that you don't have a monthly bill, you buy new cards as you need them. Two is that you can buy the cards online, tax free, usually at less than value price.
On the first point. Look at your cell phone bill, how many minutes do you use in a month? I have a T-Mobile phone, there are others, but I'll use their information for this point. Let's assume it's 300 minutes. Now, that might be really low compared to what you use, but if you used a prepay phone you might pick up the desk phone at your work a little more often. With T-Mobile they have several pay options, I prefer the $100 card for 1,000 minutes because it doesn't expire for 12 months. That means you would buy a new card roughly every 3 months, or $400 a year. Right there is a savings of $200 in this example (most cases will probably save more).
But then comes the second point. I don't pay $100 for the $100 card. In fact I just bought 2 (one for me and my wife) from ephonecard.com (formerly cheapphonecards.com). With no taxes, and 10% off with the discount code 'ecoupon88' (or 7% with 'everyday') I only spent $90 a card. This would mean an annual savings of $240 in our example.
A prepay phone is not for everyone, but give it some thought. You might have to give up your snazzy iphone or andriod and you'll probably text less often, but you can save some serious money and you can step away from your phone more often, both leading you to live in the moment much more often.
What approach have other you taken or what experience have you had with prepay phones?
TIP: If you find yourself using up minutes on customer service calls because you don't have a home phone, try Google Voice or Skype.
TIP: With T-Mobile cards when you get your next card, your current balance rolls over into the next expiration period.