Thursday, August 7, 2014

Forget the Latte Factor, How Much Are You Paying For A Cell Phone?

A Facebook status update from earlier in the week read something like "Stuck in a frugal person's hell....AKA US Cellular".  It was a cell phone that dipped beyond the point of functioning that forced me to make the short walk to the storefront in the shopping center next to my office.  With apparent software and hardware failures it was no longer a question, I needed a phone, an operable phone. And I needed it immediately; there were 4 voicemails on my phone I could not listen to.

In I went.  Questions, answers, more questions, annoyance, and out I stepped.  Incoming calls and text were functioning on my phone, and I was able to speak with my electronics guru husband, and fellow frugal soul. We chatted about options.  Break free, go to the guy I use!  He was advocating I chuck the phone and US Cellular, to go with a regional carrier that sells service plans for half the cost of mine.  "But when, and it took you quite a bit of time to set it up, what if they go out of businesses next (his previous regional carrier had).  With my practice and the kids, I need reliable service!!!"  And so we hashed out points for me to re-enter the store with.  Two hours later, yes 2, I left with a new phone in hand.  I worked for it, and so did the unfortunate salesman who had to handle my case.

My main point -- there is no such thing as a "free" phone, don't let them fool you.  In my case I was contract free and had earned 21,000 points.  I could use the points to get a "free" phone, but to do so I had to sign a 2 year contract.  As noted above, the US Cellular service plan is 2x as expensive of smaller regional ones. Those so called "free" phones are actually financed over the period of the 2 year contract; you pay a premium each month, but instantly receive the latest and greatest of phones.

In my case I signed a 2 year contract, but the rate was $20 less a month than my current plan.  Thanks to lots of free wi-fi in the world, I opted for a lower data rate.  I'll use free wi-fi more and my US Cellular 4G data less.  Because I signed a contract I was able to use my points.  8,000 points got me free activation. Another 10,000 got me a phone, some sort of Motorola.  There was no point in banking my points in case I need a new phone next year -- "you are only eligible to use them every two years", exact words of the sales agent.  I had been told I could use the points, if I signed a contract, for: activation; a phone; and accessories.  Seeing that I had some points left I inquired about a gel cover for the phone, and was unable to hide my disgust at the response "oh, to use points for accessories you have to go to corporate, and we're not corporate."

Common culture makes used car salesman the butt of many jokes.  I've always been sensitive to those given my father earned his living buying and selling used cars.  In my frugal opinion, the US Cellulars and other phone companies of this world are no better than the snake oil or used car salesmen of the past.  They plan to extract money from your wallet and to do so in the manner of a pick-pocket.  Extricating myself from this land of phones is a long-term goal, one I'll tackle when I don't have files on my desk to address and preschoolers to pick up.  If you have the time, and a budget calling for savings, consider changing up your cell plan.  My exit would look something like this:

  • $350 to cancel the contract
  • 9 months of half the cost of my current plan would equal $360, equal to  the cost of the fee to break the contract;
  • sell my US Cellular branded phone on Ebay for about $150, and use that money to buy an unbranded phone to use with a regional company.
I doubt I will do this, there are far too many ways to use my time.  Enjoy it with kids and husband, take care of my health, earn money serving clients at work.  The thought is tempting, especially when they kept saying the phone was free.  Nothing bothers me more than being lied to about money.  The phone is not free, the cost is buried in a service contract.  How well do you know yours?  Be frugal, dig in, ask, seek out options, and save!

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