NEW YORK (MainStreet) -- Now that so many U.S. consumers are going "cable-free" in favor of standalone video packages like Roku and Hulu, cell phone bills are now being targeted by many of those same consumers who've grown weary of high phone bills. Call it cord-cutting 2.0.
According to a recent study by Coupon Cabin, 46% of cell phone customers have a monthly bill over $100, while 13% have a bill over $200 a month. Ask any parent of teenagers and you'll hear horror stories of bills $300 up, thanks primarily to budget-sucking "data overages" that telecom companies like Verizon or AT&T use to lard up monthly fees.
Now, no-contract providers like GIV Mobile, Metro PCS, PTel, and Republic Wireless are popping up with low-cost alternatives to the large carriers, with some plans (like GIV Mobile), starting as low as $20 per month with 250 MB of 4G data. (The company also donates 8% of the monthly bill to the charity of the customer's choosing.)
Going to a no-contract carrier isn't the only way to save cash on your monthly cell phone bill. But if you do, take some precautions first. "You can sign up with a non-major cell phone provider such as T-Mobile, Boost Mobile, Virgin Mobile, Cricket or Metro PCS," says Harrine Freeman, chief executive officer at H.E. Freeman Enterprises, a Bethesda, Md.-based financial services firm. "Before switching, verify if your cell phone runs on a CDMA or GSM network. Not all phones can be used on all networks."
Freeman also advises getting a basic plan with basic features.
"Comparison shop online or by calling different cell phone companies to get the best value for your money, and eliminate unused or unnecessary service features such as: caller id, caller ring tones, conference call, detailed billing, etc. mobile roadside assistance, monitoring, extended warranties, and insurance," Freeman said.
Other experts say to avoid pricey trapdoors and be ready to negotiate. "You don't really need the latest phone," says Michael Bremmer, CEO of California-based Telecomquotes.com, a technology business services company. "And most carriers keep you on the 'treadmill' by allowing you to 'upgrade' your phone as often as three times per year. That's just a waste of money."
Don't be afraid to haggle with carriers, Bremmer adds. "They spend millions on ads to sell phones, and they'll gladly drop their prices if they believe you're going to cancel," he says. "Educate yourself on the latest plans and then call to cancel. But be willing to do it -- the threat has to be legitimate."
Real consumers seem to have caught on that there are lower-cost options that don't chain them to a large carrier for years on end. "My wife and I had been with Verizon for about five years, paying about $170 a month for our plans," says John Schmoll, Jr. founder of the personal finance site Frugal Rules. "We switched two months ago to Cricket for a total of $70/month. Cricket is on the AT&T network, and we've seen little difference in call quality."
Schmoll says if you're on WiFi most of the time, it doesn't make sense to stay with one of the major carriers (Verizon, AT&T, etc.) as you're significantly overpaying each month. "Just be careful when you switch carriers to make sure your phone will work with the new carrier," Schmoll says. "I was able to take my old S4 to Cricket from Verizon. But my wife was not able to take her iPhone as it was built to only work on Verizon."
Some consumers are really going old-school when it comes to reducing cell phone charges, and they're saving big bucks in the process.
"I get hand-me-down phones from my wife, who has the latest, greatest and most comprehensive service plan available," says Mike Arman, a Florida-based cell phone user. "Once she hands me the old, useless, obsolete phone, I 'jailbreak' it -- which takes about an hour's research on the Internet -- and insert my T-Mobile prepaid SIM card. Bingo - I'm paying about $65 a year for cell service, tax included."
Arman doesn't use any data services, which really cuts into costs. "I can read a map, I don't text and I don't browse the web, and if I want to know what the weather is, I look outside," he says. "I only use it when time is of the essence, and I don't yak away for hours, because I have nothing better to do."
That approach may be a reach for new-age smart phone users, but if you're really serious about slashing cell phone charges, all options are on the table - whether the major carriers like it or not.