You and your family have to pay many bills every month, and the telephone bill average is one of the most important things you can’t do without. However, in case it accounts for a high rate of your total income, and you struggle with bills like that every month, it’s not a good sign for you or your family. It’s time to figure out how to reduce that as soon as possible. Hanfincal will tell you everything you need to know about the current state of the telephone bill and how to reduce it.
1. How much a phone bill is for one person?
In 2021, the average monthly cell phone bill of a mobile hot spot in the United States was $127.37 for one person aged 25-64. That equates to a whopping annual cost of $1528.44 per person!
In comparison, according to Ofcom statistics, the average UK phone bill is only $50.87 per month. This means that Americans pay an extra $76.5 per month, or $918 per year, for the same service!
2. What are the average mobile phone bill options?
2.1. Phone on a plan
The average phone bill for phone-on-a-plan customers is $81 per month or $972 for a year.
These prices are not surprising given that the most expensive smartphone easily charges $50 or more to your monthly costs. Furthermore, because only a few telcos offer the phone on a plan, fewer options for cheaper plans to bundle with unlimited data windows range from $30 to $45 per month.
The same survey, conducted in 2021, discovered that 14% of participants had 50GB to 99.99GB of data included in their plan, 7% had 20GB to 29.99GB of data retained, 8% had 10GB to 14.99GB, and another 7% had 100GB or more. Only 15% were unsure how much data they had, and only 1% claimed no included data.
Consider the idea you want to select; it must correspond to your data demand and the number of people in your family who use it.
2.2. Postpaid phone
You have to pay a premium of $200 or $500 for one postpaid phone plan (you may be refunded after a year or so of this amount).
If you intend to stay in the U.S for more than six months, a postpaid cell phone plan is the best way to go. Each postpaid plan includes a set number of daytime minutes. That is, you will pay for both incoming and outgoing calls from the monthly minutes allotted for daytime.
The advantages of a postpaid plan are that you can talk as much as you want with your friends and family after 9 p.m., and you can also talk unlimitedly on weekends, depending on the one you choose. Again, unless otherwise specified, incoming is NOT free.
The most significant disadvantage of the postpaid plan is that they will conduct a credit check to examine your credit history. You can not register for the postpaid unless you have a good credit history.
2.3. Prepaid phone
The premium prepaid plan is worth at least $40, you will get some benefits, such as free weekend cell phone calls, and so on.
Incoming calls are NOT free in America. When you purchase a plan from a cell phone service provider in the United States, you receive minutes; however, the minutes are charged for outgoing and incoming calls. Nothing beats the free incoming concept.
The best part about prepaid is that there is no credit check. The per-minute rate can range from 10 cents to 25 cents. There are plans that state that you are charged on the day you use with a daily fee, but you get more minutes, and so on. Also, in recent times, with smartphones, we have many Data-Centric plans, such as how much data you get per month or unlimited. Overall, prepaid is not a good investment if you attend to stay in the United States for more than six months.
3. Discover five reasons for high cell phone bill
3.1. Unlimited data
How much data do you typically use in a month? Most people use no more than 3-5GB of data per month for every internet activity. Is it essential to have unlimited data for unlimited talk text? That is the quickest way to increase your monthly phone bill.
3.2. Hidden fees and taxes
Hidden fees and taxes are also significant drains on your wallet. Did you know that, on average, you have to pay equates to an extra $5 per month per line?
3.3. New smartphone upgrades
Having a new smartphone necessitates a higher price. Bundling the cost of a new $1,000 phone over two years increases your monthly bill by $40. Do you truly require a new phone?
3.4. Inadequate awareness of alternative options
Don’t waste your money on disreputable carriers. Give your trust to the right place; you will save a lot of your money. Are you surprised to learn that the United States has over 50 low-cost carriers? Before you buy anything, let’s know and have a grasp on it as much as possible, which can prevent you from overpaying.
3.5. Advertised pricing for 4 lines
Fewer lines are significantly more expensive for averages. The advertised price is not what you pay.
4. How can I cut down my cell phone bills?
4.1. Use a no-contract cell phone
If you buy a phone from a giant cell phone company, you must sign a contract for two or three years to use their network. If you want to cancel before the contract period is up, you will be forced to sign a hefty cancellation fee.
Purchase a no-contract, gently used mobile phone or second-hand phone to avoid falling into this trap. These phones are “unlocked,” which means they can be used with any carrier. This way, you won’t be reliant on the not cheap plans at all offered by major carriers, and you’ll have the freedom to switch carriers whenever you want!
4.2. Switching to another alternative low-cost carrier
A mobile virtual network operator (MVNO) is frequently less expensive than large carriers like Verizon or AT&T.
Unlike the large carriers, MVNOs such as Mint Mobile, Consumer Cellular, and Republic Wireless does not have their networks. They essentially act as middlemen, buying data in bulk from large carriers at wholesale prices and reselling it to consumers. This means you can get an extensive network without paying a premium.
Depending on how much data you use, each carrier offers different plans. The monthly fees range from $15 to $40. According to JD Power, the average billing when using an MVNO is $77, which is roughly half the price of the large carriers.
If you want to be extremely frugal, get the cheapest idea possible and avoid using your cell data by using Wi-Fi networks.
4.3. Pay for what you use, get rid of unlimited cell phone plans
Many non-traditional wireless mobile phone carriers have emerged in recent years. You have freedom before choosing a carrier and a cellphone plan that meets your specific requirements. You no longer have to get stuck in an expensive multi-year contract.
The better you understand your needs, the better equipped you will be to choose the right selection. Although unlimited plans sound appealing, you may not be a frequent texter or talker. With that plan, you may find yourself paying for minutes and texts that you don’t require. Selecting an idea that meets your specific requirements would be more cost-effective.
4.4. Bundle with your family and friends
It turns out that sticking to your parents’ family plan is a wise financial decision. And, if you aren’t still sharing data with your parents, think about starting or joining a group plan.
The more participants, the less expensive it is per person. A single line on Verizon, for example, costs $70 per person, not including taxes and fees, under the “Start Unlimited” plan. A four-person plan will cost each person $35, excluding taxes and fees. That’s a $420 savings for a year.
4.5. Always check for discounts
If you work for a large corporation, looking into employee discounts on mobile phone plans may be worthwhile. Many large corporations provide such deals, which can result in significant savings.
Some providers offer discounts to first responders, active-duty military, veterans, and seniors. You can always research or inquire about available discounts to see if any options apply to your situation.
To keep your discount active, you will also need to verify your status, possibly with a pay stub or an email address.
4.6. Use the right credit card
When you use a rewards credit card to pay for cell phone services, you can earn extraordinary rewards in the form of cashback or travel rewards. Here are some examples of credit cards that offer attractive cashback:
- Chase ink business cash credit card: Each account anniversary year, earn 5% cashback on the first $25,000 spent in combined purchases at office supply stores and on internet, cable, and mobile phone services (then 1 percent ).
- Citi double cash card: Earn 2% cashback on your cell phone bills, 1% cashback on all eligible purchases, and an additional 1% cashback after you pay your credit card bill.
- Capital one venture rewards credit card: Earn 2 miles for every dollar spent on eligible purchases.
4.7. Reconsider insurance
Insurance is paid for if something goes wrong with your mobile phone, but what are the chances that something wrong will happen? Rather than paying for insurance monthly, investing in a sturdy and long-lasting case may be worthwhile.
Furthermore, you must pay a deduction for each claim that you file, and there is a limit to the number of claims per year. Typically, that can be two or three times per year. Taking these factors into account, the financial benefits of not having insurance outweigh having it.
4.8. Analyze your current plan
Carriers frequently offer a variety of plans, so it’s a good idea to check to see if you’re on the right one.
Take a closer look at the plan you’re currently paying for the next time you get your statement. Stop your current cell phone plan if you are overpaying for services you do not require.
Also, look into some of the extra benefits provided by carriers that you may be able to take advantage of.
4.9. Switch to applications
Most people nowadays pay for texting plans, but the question is, do we need one? With the advent of various applications such as Telegram, WhatsApp, Messenger, and Instagram, it is now possible to send messages to others for free. As a result, all you’ll need is a data plan to stay in touch with friends and family.
These apps also allow you to make free phone calls, whether via WiFi or data.
Cell phones, particularly smartphones, have become an indispensable part of our daily lives, making them a burdensome expense to eliminate from your budget. However, there are many ways to alleviate the financial strain of the high telephone bill average on your wallet each month. Consider all of the intelligent methods HanFincal listed above; they can help you save 50% to 80% on your mobile phone expenses.