Cell Phone Contracts

How Much is that Text Really Costing You?

When Amy sent 1,000 extra text messages in May, her bill skyrocketed from $50 to $250. After paying the painfully high $200 penalty fee, she decided to buy unlimited text messaging for her phone.

A few months later, a new high-tech phone came out. Amy really wanted one, but her service provider did not offer it. Since her current contract was ending, she decided to switch providers to get the new phone. After she switched, however, she received a $200 early termination fee from her previous provider. Apparently, the text message upgrade she bought in June had extended her contract by two years. Amy had no idea that something as simple as text messaging could cost her so much.

Like Amy, you may not realize that getting a new phone or improved plan may automatically extend your cell phone contract. To avoid paying penalties, always read the fine print. It could save you hundreds of dollars.

What to Look for in the Fine Print

The monthly total of all charges: Advertised prices usually do not include costs such as taxes, new phone activation fees, or state and local fees.

Limited time offers: A promotional deal may only last for a limited time, after which you will be charged more for using the services.

Return policy: Choose a plan that gives you a few weeks to cancel your contract and return your phone if it does not work. Otherwise, you will have to pay cancellation fees.

Early termination fees: Almost all providers charge you about $200 per phone number for ending your contract early.

Roaming/long distance charges: You may be charged for roaming even when you are in your home calling area.

Daytime, nighttime and weekend minutes: Cell phone providers define calling periods differently. Know exactly when your daytime, nighttime and weekend minutes begin and end.

Upgrades that extend your contract: If you change your plan or get a new phone, your contract may automatically extend one or two years.

The provider`s right to terminate your service: Most cell phone companies reserve the right to cancel your service for any misuse, such as paying late or harassing their employees.

Cell Phone Tips

• Compare at least three different services before choosing a plan
• Talk to friends and family to determine which service will work best in your area
• Get all promises in writing. Otherwise, they are not guaranteed.
• Don’t sign a contract until you have read all the fine print.
• If your phone is lost or stolen, notify your service provider immediately. Otherwise, you will be charged for any unauthorized use.