MINNEAPOLIS -- We talk a lot about gas prices. They go up, they go down, and they hover for awhile. When was the last time you thought about your cell phone bill? It goes up, and then... it goes up again. Granted, we get more services these days, but still, those budgets are taking bigger and bigger bites out of the old family budget.
According to the U.S. Bureau of Labor Statistics, the average American household was paying $210 per year for cell phone service in 2001. Last year (2011), that same household was paying $825 per year. That's a 293 percent increase.
"If you talk to customers and you ask them what's a cell phone to you? They will use the same words that they will use to describe heat and food and electricity. It's a necessity to them," University of Minnesota Marketing Professor George John explained.
Brett and Mary Kadrie of Minneapolis confirm John's theory. They are busy professionals and parents paying $153 per month for two phones with talking and texting limits but unlimited data. There's seems like a pretty typical phone bill and both say they're not willing to compromise on the unlimited data. We tried to find them a lower rate. "If you get this down to $100 that'd be awesome, but I'm not holding my breath," Mary said.
John Gardner of Minneapolis won't hold his breath either. He's a busy guy with two jobs (lawn maintenance and limo driving) and a growing mobile bill. He's paying more than $100 a month; he goes over his 4GB data plan each and every month, costing him $20 to $40 in overages which add up to $240 to almost $500 a year. "It's not looking good and you don't have a choice but to pay it really," he said.
Logan Abbott, who runs a website out of San Diego, wants to change that. Abbott's website, called myrateplan.com, is sort of a Travelocity or Priceline for cell phones, searching plans for the big four (T-Mobile, Sprint, AT&T, and Verizon). While it's a do-it-yourself site, we sent the Kadrie's bill, along with Gardner's bill, to sunny California.
"Phone companies make most of their money on people going over their minutes and their data and their texting. They're making a killing on that," Abbott told KARE 11.
Abbott did find Gardner a few unlimited data plans that could save him $30 to $50 a month. Unlike Gardner, the Kadries are grandfathered into unlimited data, which Abbott calls a bit of a luxury considering the type of phone they use. Still, myrateplan found the Kadries $20 a month in savings. Here's the kicker; all three of them would have to switch which kind of phone they use, something none of them may be willing to do.
It's the age old question. How much are you willing to give up to save?
That's a question that Kelly Robinson and Larry Quashnick are kicking around right now. The couple has four kids, so they have six cell phones they pay for. Sometimes they're all in use at the same time. "I just shake my head and think wow, what happened?" Robinson wondered.
The ten year old twins have basic flip phones and plans, but the 16 year old, 18 year old, and mom and dad have unlimited call and text but limited data, which they sometimes go over (in Larry's defense, he has yet to exceed his data limit). The cell bill doesn't equal the mortgage, but it's more than any car payment and sometimes equals the monthly food bill.
They pay about $400 a month or almost $5000 a year. "It's crazy how high it is. That's a lot of coin," Quashnick said. The family's carrier only allows a maximum of four phones per plan so the savings of adding phone after phone stop after four, which certainly adds to the bill.
A myrateplan search found a carrier that now allows up to ten family members onto a plan. The search also found more data the family could take advantage of and it would only cost them about $320 per month. That would save the family almost $1,000 a year. "It's just ridiculous what we could do with that money," Kelly Robinson said with a smile.
Abbott says there's a good lesson learned here. The phone providers are constantly switching what they offer and at what price. There are often times new deals and incentives available. The point is don't just become complacent and sign up for another new contract without doing some research. Checking around when the old contract comes up could save you hundreds.
I suppose we have to face this one simple fact: the notion of giving up the phone or the data seems like it would just be too difficult at this point. "It's very difficult for us to control ourselves when you look at the forces impacting us," John concluded.
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