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Shopping for Cell Phones

Cell phones are pretty much indispensable. Some people get cell phones for the convenience of  staying connected to friends and family wherever they might be.

  • Most older people use their cell phones for safety in the event of an emergency.

  • Frequent business travelers use phone cameras to help remember where they parked the rental car they're driving.

  • Some grandparents have stopped carrying wallet photos of their grandkids and instead store pictures on their phones.

  • Subscribers to some security systems can monitor things at home by downloading images from home-video cameras to their mobile screens.

  • Some fast-food chains let customers text message their orders for speedier pick-up.

  • Parents can subscribe to Global Positioning System services that track a child's location en route to and from school.

  • Wristwatch sales have slowed as teens and young adults tell time by their phones.

  • Some cell phone users can check traffic, weather, baseball scores, and flight cancelations.


According to an AARP survey, people age 50 to 65 are just as likely as younger people to have cell phones, while most people age 65 and older buy them for security in an emergency. The industry estimates there are about 250 million U.S. cell phone subscribers, and this number is increasing annually. According to a recent study done by Strategy Analytics, 1.1 billion cell phones were sold worldwide in 2007.

If you are thinking about going cellular or changing providers, shopping for a phone and a service plan can be confusing. To get the right service for your needs means choosing from even more options than when you choose regular home or long-distance phone service. Also, you may have to sign a contract for cell phone service, locking you into service with a particular company for one or two years. Pre-paid service is another option, but rates are typically higher.

What should you look for if you are buying a cell phone for the first time or want to switch from one carrier to another?

Steps to Follow
  
Before you shop, figure out how you plan to use your cell phone, because you’ll be billed according to when you receive and make calls. Will you use it like your home phone, with many calls every day, day and night? Or will you use it once in a while to let someone know you’ll be late? Some plans favor weekday use; others give you a break on evenings and weekends.

Find a plan that best matches your use. Think about:

  • When you make the most calls

  • How long you talk on the phone

  • Where you call from, and where you place calls

  • Who calls you

  • Whether you make or receive long-distance calls

  • Whether you will use text messaging or will want to take and send pictures


Most companies offer plans with a certain number of minutes for a flat, monthly fee. Your cell phone bill is not like your home-phone bill. With most cellular plans, you pay for the calls you send and for the ones you receive. All calls—local and long distance—cost by the minute. Extra minutes, calls made outside the calling area, unlimited mobile-to-mobile calling, and long-distance calls may cost more.

If you don’t use all the minutes in your plan each month, you could waste money, because you would still pay for them. This is because many plans do not roll over unused minutes to the next month. As a result, the cost-per-minute can be quite steep if you underestimate how many minutes you’ll use monthly. Up to 50 percent of the cell phone industry’s income comes from charges customers pay if they go over their plan minutes and from minutes that customers pay for but don’t use. If you find you are going over or under your plan’s minutes, ask your company what it would cost to change to a different plan and whether a change means your contract will be extended.

Compare the deals. Get the most for your money by comparing prices and options for cell phone service plans. You should be shopping more for the service plan than for the phone itself.

Read the fine print. Pay attention to how long the contract lasts. Switching from one company to another can be costly. You might be charged a hefty fee for canceling your service contract before it ends. Wireless carriers typically charge between $100 and $200 per telephone number for terminating a service contract before it expires. As such, canceling a family-share plan with four phone numbers could result an $800 early termination fee.

If you lose or don’t use your phone, you will still have to pay for the monthly service contract. If your phone is lost or stolen, contact your carrier immediately, or you will be responsible for calls and other charges made by the thief. One AARP staff member reports that although she reported her son’s lost phone within an hour, more than $20 in charges had already been made.

Ask about the company’s return policy. Most providers offer a risk-free trial period of 14-30 days after activation, which allows you to cancel your service and return your phone without paying a cancelation fee. However, some carriers may still charge a “restocking fee” or keep your “activation fee” (typically about $35) even if you return your phone during the trial period. 

Get a copy of the map specifying the area your plan covers. Some carriers offer interactive coverage maps on their Web sites, where you can view coverage down to the street level. Be sure to use your cell phone to test your service coverage during the trial period. Your cell phone may not work everywhere you go, even in your own community. Make sure the plan covers the areas where you will make and receive most of your calls. Calls outside the service area can cost extra or may not connect.

Match your phone with your service. Every cell phone doesn’t work with every plan. If you want to switch providers, you may have to purchase a different cell phone, because your old phone won’t work with the new service provider. Many companies offer reduced-price phones in exchange for long-term contracts with termination fees.

More Points to Consider

Find out your phone’s battery type and costs. Batteries add to the cost of using your phone. Ask about how long a battery will last and about the cost of a new one. Phones with rechargeable batteries may cost more at first but may save you money in the long run. But you have to pay extra for the charging device. A dead battery is no use when you need to make a call for help. 

Don’t dial and drive. Pull your car over to the side of the road before talking on your cell phone. Call can distract you and cause accidents.

Take Action

  • AARP's Public Policy Institute research report, Breaking Up is Hard to Do, calls for longer grace periods to get out of new contracts, reasonable early termination fees, and better disclosure of all fees and add-on charges.

  • The Federal Communications Commission (FCC) explains why you can’t use your cell phone on the airplane.

  • Check out several Web sites that allow you enter your ZIP code to compare prices of cell phone plans available in your area.

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