About Cell Phone Plans

Prepaid versus postpaid. Individual versus Family Plans. Local versus Nationwide. Limited versus unlimited minutes. Rollover minutes. Service coverage. Text messaging. Picture transfer. Data plans. Choosing the right cell phone plan can be like a make-your-own ice cream sundae bar; you can come up with the perfect combination or you can get sick from overload. Before signing a contract, consumers should research the cell phone plans offered within their area.

History

When the first cell phone plans were offered in the early 1980s, local calls cost as much as a dollar a minute. As more companies jumped on the cell phone band wagon, the cost of minutes decreased and companies began offering long-distance and roaming features. Today, beyond basic calling features, cell phone plans include family or "shared" plans, prepaid plans, unlimited "circle of friends" calls, text messaging, data and picture transfer, and the ability to surf the Internet.

Features

The features cell phone plans offer give consumers greater control over their personal cellular needs. Depending upon the plan chosen, customers can have a low amount of minutes each month or unlimited calling. They can avoid a monthly bill by having a "pay as you go" or prepaid plan. They can place calls across town or across the country. Families can share minutes rather than have individual plans, and some plans allow parental control over children's phones. Data plans allows access to email or the Internet when away from the computer.

Types

There are five basic phone plans, grouped into post-paid and prepaid. Post-paid, in which the customer pays for cellular service during the previous month, are local, regional, national and shared. Local plans provide customers with a set number of minutes that can be used within their area code; extra fees are charged for long-distance calls. Regional plans expand the area of local calls outside the local area code, like state-wide coverage, and add additional fees for calls outside the set region. National or coast-to-coast plans charge the same amount whether the call is made within the local area code or long-distance. Shared plans are when two or more people each have a separate phone and phone number and then share from a pool of minutes. Prepaid plans do not require a credit check or contract; some carriers offer different types of pre-paid accounts including a per minute rate or paying a daily usage fee and lower minute rates. Some carriers also offer shared pre-paid plans.

Geography

All cellular carriers have towers within their area. When their customers place calls outside that area, they use a roaming feature that allows the call to be transmitted through another carrier's tower. Although certain fees may apply, roaming allows a wider range of signal for calls to be made. Regular post-paid plans offer roaming features. Pre-paid plans do not offer roaming, which limits the calls that can be made even if the per-minute cost is the same for local and long distance.

Considerations

When choosing a cell phone plan, customers need to consider several things. Coverage: Consumers should check the coverage maps on the carrier's website for signal strength in the areas they plan to use a cell phone most. Consumers should consider how often they will use their cell phone; cost-per-minute rates decrease as the overall amount of the plan increases. Some carriers allow customers unlimited calls to other numbers that use that carrier or have a "calling circle" feature that allows unlimited calls to numbers the consumer selects. Consumers should consider whether the extras offered are necessary. Unlimited data plans are good for business people who travel extensively, but can be quite pricey for a teenager who merely wants to surf the web. Some companies offer roll-over features whereby customers do not lose unused minutes each month.

Warning

With the exception of unlimited calling plans, there is a charge for going over the basic minutes allotted to each plan; some carriers charge more than 50 cents per minute when customers exceed the minutes in their plan. Post-paid plans that require a contract have a penalty should the customer cancel their plan before the expiration date. Some plans have an additional charge if the bulk of calls are made outside of the local calling area.

Resources

• T-mobile
• Verizon
• AT&T