Archive for March 15, 2009

Changing your cell phone plan: Why, and what can go wrong

cell phone dialing Timing is everything in comedy, but it's also important when adding or subtracting minutes from your cell phone service plan. If you don't want the joke to be on you, be careful about how and when you make changes to your cell phone plan.

The goal of changing your plan to one that has more minutes is, of course, to avoid overage charges that can run as high as 45 cents per minute when you expect your cell-phone usage to change, either permanently or temporarily—in response to a family crisis, for example. Conversely, if you consistently, or even temporarily, expect to use fewer minutes than your current plan, you may want to switch to a lower-minute plan that costs less per month.

We recommend making such changes as necessary. You can always switch back to your original plan when your calls returns to their old pattern. The major carriers no longer extend the term of your contract if you make such changes.

Stepping up to a higher-minute plan could cost you an additional $20 on your monthly bill at Verizon, for example. But that's cheap for the 700 extra minutes you'd get. If you bought them as overage, at 45 cents per minute, you'd pay a heart-stopping additional $315 on your bill that month.

But switching to a new plan, whether it increases or decreases your total number of minutes, can actually add overage charges to your bill if not done right—in other words, if not done at the optimal time of the month. One Consumer Reports staffer—me—switched from a Verizon 1,400-minute plan to a 2,100-minute plan midway through my 30-day billing cycle. Imagine my surprise when I received a $162 bill for overage minutes.

What went wrong? In short, I hadn't accounted for pro-rating of the included minutes in my plan. I switched about halfway through my 30-day billing cycle. So my original plan's 1,400 minutes were pro-rated to only 768 allowed minutes up to that point in the cycle. Unfortunately, I had already used 1,174 minutes as of the change date, 406 minutes over—even though I'd just signed up for 2,100 minutes and only used 1,770 over the entire month. At 40 cents a minute, those 406 minutes added up to the $162 extra charge.

I complained to customer service, and—another surprise—Verizon adjusted my bill to what it should have been. This consumer-friendly response may explain why Verizon consistently gets high marks on customer service from our long-running surveys of tens of thousands of cell users each year. (Our Ratings of cell phone service providers are available to subscribers.)

All the major carriers say it's possible to inadvertently create overages because of pro-rating for the time in the cycle at which you made a change.

Have you had such cell shocks? How did you deal with them? I'll roll some of your experiences into a followup blog with my own advice on how best to time changes to plans, and what to do if you get stuck with a whopping bill.

—Jeff Blyskal

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