Is Your Cell Phone Bill Too High?

You could save hundreds of dollars a year if you switch to a no-contract plan.

Americans waste an average of nearly $350 a year on wireless service, according to BillShrink, a service that compares rates for phone plans, among other products. Most of the excess spending comes from overestimating how many voice minutes and text messages they need and underestimating how much data usage their plans should cover. It doesn’t help that plans from the major wireless carriers make it difficult to balance voice, text and data offerings to get the best price.

As the big carriers grapple with rapid changes in phone technology and competition from Skype and other Internet calling services, their service plans are becoming more and more complex -- leaving consumers with a maze of prices and services to navigate. Plus, wireless providers have designed a golden-handcuffs business model that dangles an inexpensive or free phone in exchange for committing to a two-year contract. Breaking that contract means you’re on the hook for a prorated fee that can be as high as $350. And to entice you to stay, your carrier is likely to nudge you to upgrade to a slick new gadget just as your contract is about to expire.

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