Statement by Jon Fox, CALPIRG Consumer Advocate:
Verizon announced earlier this week that they would no longer be offering customers cheaper options for limited voice and text plans, shifting to unlimited voice and text minutes instead.
While this change may benefit families or business on shared accounts, it will lead to price hikes for most individual smart-phone users. Today a Verizon customer with a single smart-phone, a 450 anytime minutes voice plan, and 2GB of data pays $69.99 a month ($39.99 + $30) before taxes. With the new Share Everything plan, a consumer can expect to pay $100 ($40 + $60) instead for a similar plan.
Consumers should not be forced into expensive plans. For nearly 30% of American households, wireless service is their only phone line. Cell phones have also increasingly become the primary vehicle for Internet access for many low-income Americans. As leading wireless providers adjust to meet shifting market trends, they must ensure that they do not price out lower-end services while focusing on higher-end premium customers.
Buying a new cell phone is a big expense for Californians, averaging nearly $900 per year. To save on their monthly phone bills, would-be Verizon consumers should compare prices at other wireless providers, and consider cheaper pre-paid phone plans that often include unlimited data.
With nearly two-thirds of Americans paying for cell phone services they do not need or use, CALPIRG’s cell phone shopper’s guide – Making the Right Call – helps consumers choose what’s best for them, save on their cell phone bills, and avoid bill shock later on. CALPIRG’s report notes six steps consumers should take to get the best deal when buying a cell phone:
Step 1: Know your needs. Thinking about what services you use, and how much, in advance will help avoid over-paying for products you don’t need or use –saving hundreds of dollars a year.
Step 2: Shop around. The cost of devices can vary greatly whether you buy in a brand store, at a 3rd party provider (such as Best Buy), or online.
Step 3: Compare pre-paid and post-paid services. Compare the plan you want with a pre-paid plan versus a post-paid plan. If you are a light cell phone user, getting a pre-paid device can save you nearly $35 each month without the hassle of a two-year contract.
Step 4: Ask for a discount. Many cell phone companies provide affiliate discounts for students, members of credit unions, and to certain employers (universities, large corporations, public employees, etc.).
Step 5: Find true costs. Consumers can reasonably expect to pay up to $20 per month on top of advertised prices for cell phones since they do not include federal and state taxes, service fees, and other overage charges. Consumers should ask which taxes and fees apply to their contract, and what their monthly base bill will look like prior to entering into a contract.
Step 6: Keep track of your monthly use, either online or on your phone. CALPIRG found that 40% of those consumers surveyed incurred overcharges. Track your cell phone use to insure that you do not go pass your pre-paid limits and incur overcharges.
The California Public Interest Research Group (CALPIRG) Education Fund is a result-oriented public interest group that protects consumers, encourages a fair sustainable economy, and fosters responsive democratic governance.
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