How to Save Hundreds On Your Phone Bill
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Selecting the best long-distance calling plan is no longer as simple as picking the lowest per-minute rate.
Today’s calling packages include an array of features and fee structures that make comparisons very difficult.
Watch out: If you fail to specify a long-distance plan, your carrier will charge you its basic rate, which might be
as high as 44 cents per minute -- many times what you should be paying.
To find the best calling plan for you, start by calculating your typical monthly interstate long-distance usage --
number of calls, cost per call, etc. based on your three most recent phone bills. (Toll calls within your state
are billed separately.) Then compare your current service to these low-cost options. For even greater savings,
ask prospective providers if they also offer special rates for in-state and regional toll calls.
No-monthly-fee/no-minimum-usage plans are offered by lesser-known companies -- small firms that
purchase blocks of long distance wholesale, then resell the services to consumers. Call quality is the same
as that of the major players.
Best if: You want a straightforward plan with no monthly fees because you usually don’t make a lot of long-
distance calls.
Low-cost providers: Enhanced Communications Group, 2.5 cents per minute (888-869-1141, www.dialecg.
com). Everdial, 4.9 cents per minute (800-293-7658, www.everdial.net).
Prepaid plans. You purchase blocks of minutes that can be used anytime from any phone, though cell
phones usually are excluded. (An extra fee -- 29 cents to $1 -- may apply for calls from pay phones.) You enter
a personal identification number (PIN) each time you dial -- PINs can be preprogrammed if your phone has
an autodial feature. Or you can enter on prepaid-plan Web sites the numbers of phones from which you call
regularly. This way, the service recognizes your number and you don’t need to enter a PIN. Unused minutes
typically expire after six or 12 months.
Best if: Your top priority is finding the lowest possible per-minute long-distance rate… or you travel frequently
and make lots of calls from the road.
Low-cost provider: OneSuite.com, 2.5 cents per minute (2.9 cents in certain regions). Buy as little as 400
minutes ($10) at a time. Minutes expire after six months unless additional minutes are added to the account
-- in that case, the minutes carry over for the next six months (866-417-8483, www.onesuite.com).
Unlimited plans. You can make all the domestic long-distance calls you want for a surprisingly low flat
monthly fee.
Best if: Your long-distance bill would otherwise average more than $25 per month.
Low-cost providers: AT&T Unlimited Plus Plan, $29.95 per month for unlimited long-distance and in-state toll
calling (800-222-0300, www.consumer.att.com). BellSouth Basic Unlimited II Plan, $24.99 per month for
unlimited calling (888-757-6500, www.bellsouth.com/longdistance).
VoIP plans. If you have a high-speed Internet connection, you can make calls using Voice-over Internet
Protocol (VoIP). Calls are made using a phone (not your computer), and sound quality is excellent. VoIP
plans cost about $15 per month for 500 minutes (or about 3 cents/minute, including both local and long-
distance calls)... or $25 to $30 for unlimited calling.
If you have cable or satellite Internet service, VoIP can replace not just your long-distance bill but also the cost
of having a phone line through a traditional phone company, typically $15 per month. (If you have a DSL high-
speed Internet connection, you still will need a local phone line.) You also don’t have to pay state taxes, at
least for now (see box).
VoIP plans include extras such as call forwarding and voice mail, and some plans allow calls to Canada at
no extra charge.
Drawbacks: You have to install a special router on your computer -- your VoIP carrier provides instructions,
telephone help and the necessary hardware and software. VoIP phones can’t be used during power failures.
Electronic devices that require access to a phone jack, such as certain satellite TV packages, might not be
compatible with VoIP.
Best if: You are a heavy long-distance user who already has a broadband Internet connection.
Low-cost providers: There is little difference among VoIP providers in terms of price and quality. All have one-
time activation fees of about $30.
AT&T CallVantage, $29.99 per month for unlimited calling in the US (866-816-3815, www.callvantage.att.
com). Net2Phone VoiceLine, $14.99 per month for 500 minutes or $29.99 per month for unlimited calling
(800-455-4185, www.net2phone.com). Vonage, $14.99 per month for 500 minutes or $24.99 per month for
unlimited calling (877-486-6001, www.vonage.com).
Plans to avoid
“Bucket” plans offer low per-minute rates if you agree to buy a bucket of minutes each month, similar to the
way most people buy cell-phone minutes -- but the minutes go to waste if they’re not used by month’s end.
Bundled services. Phone companies and cable providers are pushing package deals that include both
phone and high-speed Internet service. Some include cable television as well, but these plans are not
attractive.
Example: Verizon’s bundled plan charges $49.95 for unlimited local and long-distance phone service when
you pay $29.95 per month for high-speed Internet service -- about $80/month for all three services. Even
people who want unlimited calling and high-speed Internet service would be better off paying $40 per month
for high-speed Internet and then signing up for one of the low-cost calling plans listed above.
*All plan rate information is current at the time of publication. However, plans are subject to change at any
time. Always check with a customer service representative before signing up for service. Not all providers
offer service in every state.
