Shrink Your Cell Phone Bill

Money-Saving Tips 1-3

Talk isn't cheap, especially on cell phones. The average monthly mobile bill runs about $48 per month -- or $588 a year, according to CTIA The Wireless Association. But to keep business in these tough economic times, wireless carriers are scrambling to offer sweeter deals and help customers pick cost-effective plans. "Cell phone companies only advertise their newest plans, but cheaper ones are still available," says Jeff Kagan, a telecom industry analyst in Atlanta. "You just have to ask for the plan that matches your habits and budget."

If you research the options and do the math, you can slash hundreds of dollars off your cell phone bill annually. We found 13 ways to make it happen.

1. Manage your minutes
If you blab beyond your voice-plan's minute maximum, you'll be slammed with high fees -- from 5 to 45 cents per extra minute. Stay under the limit and you'll flush cash away on unused airtime. To break this bad cycle, review six months of past cellular statements and figure out your chat profile -- how many minutes you typically talk (not counting weekends and evenings if you get unlimited minutes then). Once you know, switch to a better deal. Talkaholics should consider AT&T's 900-minute Nation Plan with Rollover Minutes for $60 per month (includes unlimited nights and weekend minutes); moderate talkers should look into T-Mobile's 300-minute myFaves 300 Plan (includes unlimited weekend minutes) for $40 per month or AT&T's 450-minute Nation Plan with Rollover Minutes for $40 per month (which includes 5,000 free night and weekend minutes); and light talkers might want to consider ditching a multiyear contract plan entirely (see the next tip).

2. Get a prepaid plan
Why commit to a carrier and be on the hook for hundreds of unneeded minutes when you can buy a basic phone for $20 to $100 and then pay only for the minutes you need -- when you need them? If you're an infrequent caller -- or you have a cell phone to use in emergencies only -- you might like a prepaid voice-only (no-texting) plan from TracFone, which operates on the AT&T network, or Virgin Mobile, which uses Sprint's. TracFone's 50-Minute Value Plan ($10) and 100-Minute Value Plan ($20) have no contract obligation, but you must add money to your account periodically to maintain service. Virgin Mobile charges $20 for a 200-minute pack (10 cents per minute); $30 for a 400-minute pack (7.5 cents per minute); and $50 for a 1,000-minute pack (5 cents per minute). Yes, the cost-per-minute is higher with a prepaid plan than with a contract, but you'll end up spending less over the long haul because you're not throwing money away on unused minutes.

3. Pick a local service
If you mostly make short local calls and don't need long distance (or access from mountaintops), check out small wireless carriers. For example, Metro PCS offers unlimited local calling from $30 per month for a prepaid plan, but its coverage is limited to select areas nationwide, including Atlanta; Detroit; Ocean City, New Jersey; Waco, Texas; Nashua, New Hampshire; and multiple cities in California and Florida (metropcs.com/coverage).