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Cell Phone Plans
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Credit: Petr Kratochvil
Source: http://www.publicdomainpictures.net/view-image.php?image=14816&picture=teenager-with-smartphone
License: CC BY-NC 3.0

You’ve finally gotten your first cell phone. Now it’s time to sign a cell phone contract. But what sort of plan should you choose? Is an unlimited plan always better?

Only a Bargain If You Use It

Unlimited plans certainly look like bargains. After all, they’re not that much more expensive than the plans offering limited minutes or texts. So they have to be cheaper overall, right? Not necessarily—it depends on how much you’ll be using your phone. Companies offer unlimited plans because most people who buy them don’t come out ahead. Some simple division of decimals can help you figure out if the unlimited plan is really a bargain. 

Let’s say a company offers three levels of cell phone plans: 450 minutes for $39.99, 900 minutes for $59.99, and an unlimited plan for $69.99. Each calling plan also includes free calls to other people who use the same company as their cell phone carrier. Calls on the first plan will cost you 8.9 cents a minute, if you use all of the minutes. Calls on the second plan will cost you 6.7 cents a minute, if you use all of the minutes. Calls on the unlimited plan could cost even less—if you use all the minutes. But what if you don’t make many phone calls? What if most of your friends have purchased plans from the same cell phone carrier? Then, you’re actually better off with the minimum plan, even if the per-minute charges are higher. Why? Because you’ll save $30.00 a month.

Credit: Abigail Rogers
Source: http://www.flickr.com/photos/44282411@N04/6738333743/
License: CC BY-NC 3.0

Beware of salespeople who try to sell you bigger plans that come with more than what you need. They’ll be making money off of your failure to do math! If you’re not sure how many minutes you need to buy, talk to your family and friends. Find out what carriers they use and how often they use their cell phones, and make an estimate based on their experiences.

See for yourself: http://www.youtube.com/watch?v=bwIlG0eLmRI

Explore More

Watch the following videos to learn about the advantages of prepaid plans over cell phone contracts, how to navigate leaving a contract, and the rise of texting.




Image Attributions

  1. [1]^ Credit: Petr Kratochvil; Source: http://www.publicdomainpictures.net/view-image.php?image=14816&picture=teenager-with-smartphone; License: CC BY-NC 3.0
  2. [2]^ Credit: Abigail Rogers; Source: http://www.flickr.com/photos/44282411@N04/6738333743/; License: CC BY-NC 3.0


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