Money-Saving Hacks: How to Lower Your Phone Bill

In today’s digital world, cellphones are no longer just “nice to have” — they’re a necessity. In fact, Pew Research reports that 97% of Americans have a cellphone, and 85% of those are smartphones. Even among seniors aged 65-plus, the majority now use smartphones.

But while smartphones provide a lot of conveniences, the monthly bill that comes with them can be inconvenient for your finances. Depending on your service provider, your cellphone plan could be putting some unwanted stress on your budget. In fact, the average cellphone bill in the United States is $127.37 per month. That can add up quite a bit over the course of the year, especially if you’re paying for multiple phones.

In this article, we’ll take a closer look at how to lower your phone bill. There are more ways to lower your monthly payment than you might expect.

How to lower your phone bill: 7 money-saving tips

Fortunately, with so many cellphone companies and plans available, there are also many ways to save on your monthly cellphone bill. The following are some of the best options for carving some extra breathing room into your household budget.

1. Switch to a cheaper cellphone carrier

Major carriers like T-Mobile, AT&T and Verizon may boast broader coverage and added perks, like including your favorite streaming service as part of their plans, but they may not be the cheapest option.

One of the easiest ways to lower your phone bill is to switch to a lower-cost carrier like Cricket Wireless, TracFone, Boost Mobile or Mint Mobile. These mobile virtual network operators (MVNOs) typically provide no-contract prepaid plans with a set amount of data, texts and talk time each month. Their plans use the same national networks as the major carriers, so you can still get good coverage in most areas.

2. Look for cheaper options with your current provider

Of course, you don’t have to abandon your current carrier to lower your phone bill. You may be able to downgrade your current plan simply by taking a closer look at what you currently pay for and switching to less expensive options.

For example, if you look at your phone plan and find out you’re paying for unlimited talk, but you almost never use your phone for voice calls, that’s a place where you can reduce your expenses. There’s no point in paying for a service you don’t actually need.

3. Save money with a family plan

Bundling your phone service with family members is a popular way to save money — and you don’t necessarily have to do it with members of your own household either. Your “family plan” could even be done with a group of friends.

The idea of a family plan is that you pay less per line than you would if you were to purchase the same plan for each phone line individually. This is a popular way of saving money that still allows you to stick with your preferred carrier. Just be sure that everyone agrees on how the billing will be handled.

4. Lower your data usage

The amount of data you use can be one of the biggest factors affecting your phone bill. For example, if you use a prorated data plan, your cellphone carrier will allow you to use a set amount of data each month. Once you go over that amount, you will be charged overage fees (which can add up quickly).

Finding ways to lower your data usage can go a long way in lowering your phone bill. For starters, use Wi-Fi or a wireless hotspot when possible, as you don’t use data when you’re connected to a network. 

If you’re regularly incurring overage fees, you may be better served by switching to an unlimited data plan. Even if the unlimited plan has a higher initial price tag, it could be cheaper than paying for your data-restricted plan plus overage charges.

Alternatively, prepaid carriers allow you to purchase data upfront. When you use up your data, you can either pay extra for a data refill or wait for your plan to renew. This can help you learn to limit data consumption while lowering costs.

5. Enroll in autopay

One easy way to lower your phone bill is to enroll in automatic payments. Many cellphone carriers will discount your bill when you enroll in autopay. For example, AT&T offers a $15 per month discount on its Prepaid Unlimited plan. That’s $180 a year.

Enrolling in autopay also means you have one less bill you need to worry about. It ensures that your payments are made on time so you won’t incur late fees or experience service interruptions.

Many service providers also offer discounts when you enroll in paperless billing. Check what options are available so you can lower your bill without even changing your current plan.

6. Use a paid-off phone (and wait to upgrade)

It’s something we see almost every year: the latest iPhone comes out and consumer spending on electronics goes up. But do you really need a new phone? The latest iPhone may offer a fancy camera or better apps, but upgrading to a new phone can add a significant surcharge to your monthly bill.

When you trade up for a new phone on your phone plan, you usually pay for the phone via installments. It may seem like you’re saving money because you’re not paying for the phone upfront. But paying for the phone over the course of 18-24 months can significantly increase your monthly bill.

The reality is, you probably don’t need to upgrade to a new phone right away just because your carrier says you can. As long as your old phone still works well, waiting to upgrade can save hundreds of dollars.

7. Remove cellphone insurance

Major carriers often provide protection plans, such as cellphone insurance or extended warranties. While this can seem helpful in case you drop your phone, it can cause your cellphone plan to get much more expensive, especially if you choose the highest level of coverage.

However, you probably don’t need the highest level of coverage — particularly if you’re following our last tip and have an older phone that isn’t worth as much. You could enroll in the lowest level of coverage or remove cellphone insurance entirely to lower your phone bill. You may still have protection for your phone if you do this, as some credit cards offer cellphone protection against damage and theft when you use them to pay your bill.

Knowing how to lower your phone bill will help you save

If your personal finances are feeling a bit tight, creating extra savings can help you cover bills and other necessities without going into debt. By using even just a few of the hacks included in this list, you could significantly lower your family’s monthly phone bills, leaving more space in your budget for other needs. Every dollar counts.

If you’ve been paying for your phone bill using your credit card, lowering your phone bill can also help you avoid accumulating extra credit card debt. 

Do you already have credit card debt you’re struggling to pay off? Tally† may be able to help. By combining debt from your higher-interest cards into a single lower-interest payment, you can get out of debt quickly and create more space in your budget.

†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. The APR (which is the same as your interest rate) will be between 7.90% and 29.99% per year and will be based on your credit history. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.