Cell plan extra charges: Why and what you can do

Your cell-phone plan supposedly costs $39.99 a month, say, yet your cell-phone bill usually runs to $52 or so. Here's a quick rundown of the reasons and some remedies.

Many of the major extras are beyond your control, at least as a subscriber. The biggest bite is from state and local sales taxes. Your telecom bills are typically taxed by those jurisdictions at the same rate as other goods and services, and those rates, to say the least, show no signs of going down. (There used to be a 3-percent federal excise tax—in place since 1898 to pay for the Spanish-American war—but it was repealed in 2005.) There's also a state fee for e-911, the location-based technology that helps emergency responders find you when you dial 911 from your cell phone; you may also have to pay a separate 911 fee to your municipality for having access to those emergency responders.

Carriers also tack an assortment of administrative and regulatory surcharges onto bills to defray the costs they incur when they interface with other networks in the course of providing service, as well as other incidentals. One such fee that's attracted attention lately is one, amounting to a dollar or two a month, that reflects the carriers passing along to consumers their contributions to what's known as the Universal Service Fund, which subsidizes phone carriers operating in remote or sparsely populated areas. With more than $7 billion now in the Fund, the Federal Communications Commission has just capped a portion of it. (If you have Adobe Acrobat Reader software installed, you can see the FCC's press release on the cap on Universal Service here.) But the cap's impact on consumer fees is unclear, since the Fund still requires replenishment to remain at its current level.

But some extras that are swelling your bills are well within your control. Here's a rundown of some, and how to quell them:

A la carte text messaging. Each text message you send or receive without a plan typically costs 10 to 20 cents. The fees can be even higher if photos are attached to them. If you're paying more than $5 a month for sending and receiving a handful of text messages, signing up for plan (starting at $3 per month) can whittle costs down to as little a penny per message.

Going over your allotted minutes. If you exceed your allotted minutes of your voice plan, you may be paying as much as 45 cents for each additional minute—or up to four times or more the rate with your plan. Consider upgrading your plan to knock those charges down. Conversely, if you're routinely going under your allotment by much, consider downgrading your plan.

Using 411. Carriers may charge $1.50 or more for directory assistance. But you can get the same help for free by dialing goog-411 (1-800-466-4411) from your cell phone.

You can find more cell-phone saving tips on Consumer Reports online. Such as:

• Avoid these 20 cell-phone bill rip-offs and gotchas
• 5 ways to cut your cell phone bill (available to ConsumerReports.org subscribers.)

—Mike Gikas

Comments

[JCL]

Interested in "pay as you go" phones. No data on CR site.

We just finished testing a few. We'll publish the results soon.--Mike Gikas

[JB]

I went way over my minutes one month and was shocked at my bill because I had been monitoring my usuage with Verizon's on-line account info from my phone and believed I had stayed within my normal range. Come to find out that it was my call waiting. Maybe I should have realized this sooner but I never did. I would have someone on one line while talking to another person and assuming I was being charged for only the minutes that I was actually using while engaged in the act of talking. Not so I was told. The person at Verizon actually told me that it counted against my minutes. Even if switching over to another call, if the first call didn't end and stayed "open" then that open time is charged against the minutes along with the minutes used in talking to another person. These things aren't made clear (of course) in any contract and I suppose that had I put forth effort of common sense I would have figured it out. I should have known that no one gets any mobile air time for free even if that air time isn't really productive. Don't assume that just because you switch over that the other call has necessarily ended. I always hang up with the other person now and then call whomever was calling me back. That way at least I know I don't have someone else hanging on another line. Doesn't sound like a big deal to save a few minutes but once you go over and start getting "dollared" to death every minute counts.

That's right, JB. The meter runs both ways, whether you’re listening or not (used to happen to a friend of mine who would sometimes forget to press the End button after finishing a call). BTW, text messages can zap your wallet, as well. Spam text messages cost the same as the ones you want.—Mike Gikas

[Rob]

T-Mobile now charges an $18 setup fee everytime you purchase a phone from them. Now all you do after purchasing a phone is take your cell phone chip and put it in the phone. What setup do they have to do? This is definitely a way to make more money without advertising they are charging more for their phones.

[moneca]

I/m only interested in pay as you go phones, i.e. tracfones, verizon's new cell plans, and any others. What are the things to watch out for in these plans? Thanks. Moneca

[cindi]

I had cingular the rolling to AT&T. As we know they supposedly "kept" their roll over minutes. I had a plan that had thousands of roll over minutes that was unused. I talked to the customer service and decided to lower my plan. She failed to tell me their is a "pro rate" doing this in the middle of your billing cycle. They also didn't tell me they were going to take my roll overs I accumulated. I din't notice that they took them. I had so many left, I just didn't look at that part of the bill. I am aware they expire after a certain point, but that wasn't the case here. I recieved my bill in the mail, I opened it to expect a lower bill, and it was 275.00! I called them and they told me that they took them away when I lowered my plan! I asked them what about their large marketing advertisement feature about "roll over minutes you keep, after all you paid for them". They told me that was their policy. I had to pay the bill. This is false advertising I think!

[Tim]

I have been with AT&T for a little over 4 years, I like my current plan plus I'd rather not sign up for another 2 year contract b/c I'd be paying more for less too. Anyway, after speaking with AT&T about wanting to "Add" a media package to my current phones/plan, I recieved the following response.

"I have reviewed your account and I am showing your device and plan are still from the legacy AT&T company, which was before the merger with Cingular. None of these plans are available to be charged to currently,and in order to access any of the available features and plans you would need to upgrade your device and plan."

Does/is this legit or just thier way of getting more $$ from me and back under contract? I have tried to talk to them a couple of times to no avail.
Thanks in advance for any suggestions...

Dear Tim:

Allowing your contract to expire is often a great thing because you get to keep your service at the old rates and add the freedom of being able to drop service without incurring termination fees.

But if you want to change anything, the carrier will most likely insist you sign a new contract. If you think that's bad, sometimes carriers automatically extend your contract whenever you upgrade service--unless you can work it out with them at the time you change your service.

Regarding your 4+ year-old phone: Even though it may work fine for voice calls, it's entirely possible that it lacks the hardware for accessing the data network that carries AT&T's multimedia offerings.

My advice: Put your hard-won freedom to good use and reconsider all of your carrier and phone options. Do some comparison shopping by checking out our reviews, going to the stores, etc. Remember, you have 14 to 30 days to return a phone without incurring any penalties--at least when you buy directly from the carrier. Third-party vendors may add their own fees and restrictions.

Consider a 1-year contract. You'll pay more for the phone than with a 2-year, but at least you'll be free again in half the time. Or skip the contract entirely by going with a pay-as-you-go phone.
--Mike Gikas

[Mark]

One other thing to check is that if you live outside a city limits but have a city postal address then the cell phone company may be charging you city sales taxes. You can usually get a letter from your county office stating that your home address is actually in an unincorporated area to get the charges removed.

[Sean]

Be careful when using goog-411. The service may be "free" but after you use it, you have just opened up the door for spam text messages (which rings up the cost of your bill if you don't have a text messaging plan and adds the frustration of spam to your phone).

[debra]

voicestream/team mobile over charges for text messageing....theycharged me 20 times, for the same message to the same phonen number on the same day and same minute @.25 for a picure sent to ONE person!!!! Thats $5.00! They have been doing this since 2005! I have been trying to rectify it and they wont! They say IT IS POSSIBLE that I sent 20 pictures to the same number on the same minute! They are fraudulent!