How to Cut Your Mobile Phone Bill

If your monthly mobile bill is giving you sleepless nights then it might be a good idea to consider ways of cutting back on the cost of servicing that mobile phone habit.

If most of your time is spent chatting to family and friends then find out what carrier they use - and see if you can do a deal on the same carrier where you can chat for as long as you like to friends on the same network at a reduced cost. A good deal with the right carrier could drop the cost of your phone bill in no time. Most carriers usually have plans that start in the vicinity of around $20 a month.

If you don't use your mobile phone that often, then a prepaid card might be the way to go. By having a set monthly fee does not give you any flexibility to control your mobile phone spending, since you have to pay the minimum spend regardless of how many calls you have made over the month. Prepaid cards only charge you for the phone calls that you have made. Once your credit has been used, then you simply top up again by crediting the account. By having a prepaid card and by having to top up every so often will remind you that every time you text and call, costs you money. The only catch with prepaid plans is that the credits expire after a period of time, sometimes after 1 month or sometimes after a year depending on your carrier.

Most of us get into habits and call friends on Fridays to make arrangements for the weekend, and make general calls during our lunch breaks. If you should notice a pattern starting to develop, then make a note and find a plan that offers cheaper rates during these particular times.

By having a capped plan you do not need to pay for each individual call or SMS that you make, as you are provided with a maximum value. If you should exceed that amount, you are charged at the regular rate. Most carriers will supply you with a $49.00 cap which will give you up to approximately $300 worth of mobile phone costs, but before you go crazy calling and texting, you need to find out what services are included in the cap.

While most will include local numbers, the deal you are on may not include calls interstate, premium numbers or (multimedia message service) MMS, which includes photos and videos. So if most of your time is spent using the MMS service - and if it is not included into your capped plan, then you will find that you have to pay more than the capped rate. The more expensive the rate per call and text the sooner you will reach your cap and then you will be up for additional costs.

Some plans may charge per block of time, such as 30 seconds, while others will charge you per individual second. This means that if you speak for 42 seconds, the first plan mentioned will charge you for 60 seconds and the latter at 42 seconds. Clearly, per second charging is the preferred method in this case. Remember this does not take into any flag fall - a flat fee carries charge for making the connection.

There are many plans that will lock you into a contract for 12 or 24 months, which will prevent you from switching to a lower-cost or more appropriate carrier.

Instead of locking yourself in a plan, you have two options:

  • You can buy a prepaid card.
  • Take out a monthly plan where you pay on a month-by-month basis, with the option to pull out of the contract at any time. Please remember to read the small print to ensure that this is the case.
Published on October 10-rd, 2008 in Financial Planning
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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