Pre-paid cell phone discussion

There was a discussion on Slashdot yesterday about pre-paid phone plans in the US. Virgin and T-Mobile came up as the ones to look at. I think Virgin is a little cheaper for the absolute minimal user ($60/year vs. $100/year) but I think T-Mobile has the better phones, especially if you want an unlocked GSM phone that you can also use internationally.

Bargain cellular phone update

Since my favorite cellular phone company has changed its rates (a couple months ago), I figured it was time to post an update.

Why is Virgin Mobile (USA) my favorite? Because it's cheap! I don't make a lot of phone calls (I didn't even have a phone before the impending birth of my daughter), so the idea of adding a $40 (or more) monthly bill was a bit unappealing. If you make 27 minutes of calls a month (or less), your bill can be $5/month. And your minutes roll over, so if you make 0 calls one month, you can make almost 54 minutes of calls the next.

The basic per-minute plan is 18 cents/minute. No extra fees, surcharges or taxes. No roaming or long distance charges. (You can look at my previous post to see what the rates used to be, if you're curious. The new rates are a little cheaper for me.)

If you end up using more than 87 minutes in a month, it ends up being cheaper to go with the $6.99/month (+ surcharges + 10 cents/minute). Above that, Virgin has typical monthly plans that give you a certain number of minutes, with expensive overage dings and what-not. At that point, other vendor plans might be more competitive.

But at the low end I haven't found anything that approaches Virgin. If you know different, please let me know via a comment!

Cellphone rip-off

If you've been reading this blog long enough, you know I'm cheap when it comes to cell phones. Still, it boggles me that people so blatently pay for functionality they don't use.

Cellphone companies, especially Sprint and Verizon Wireless, have been aggressively promoting mobile video services, which cost an average of $10.70 a month for access to sports, news and weather clips. More than a quarter of cellphones now in use can play such videos. But only 1 percent of wireless subscribers are using their phones to watch them, according to a recent survey by the NPD Group, a market research firm. (NY Times)

Kudos to the people who don't see the need to pay $10.70 for cellular video. But why did you buy a phone with the functionality if you're not going to use it? If my math is correct, at least 24% of current owners are doing this.

But, you say, I got my phone for free! (Or heavily discounted.) I see. What kind of contract did you sign with your "free" phone? Do you really having a phone that can receive and play video clips doesn't cost anything?

Americans not saving

Americans' personal savings rate dipped into negative territory in 2005, something that hasn't happened since the Great Depression. Consumers depleted their savings to finance the purchases of cars and other big-ticket items.

The Commerce Department reported Monday that the savings rate fell into negative territory at minus 0.5 percent, meaning that Americans not only spent all of their after-tax income last year but had to dip into previous savings or increase borrowing.

The savings rate has been negative for an entire year only twice before -- in 1932 and 1933 -- two years when the country was struggling to cope with the Great Depression, a time of massive business failures and job layoffs.

Associated Press

A real bargain cellular phone

The NY Times has an article today titled "A Cellphone and a Plan for Just About Any Situation". Under "The Bargain Hunter", Seán Captain touts different vendor's $40/month plans and notes, "[a]s with all plans, you will spend several dollars extra in taxes and surcharges". (In some cases it's more than several. My brother has a $60 plan that ends up costing $80+ every month even when he doesn't go over his allotted minutes.)

Bah! You call $40/month a bargain? How about if you only use your phone a couple minutes a day on average or want one just for emergencies?

I went shopping for such a phone when my daughter was close to being born and my employer decided I should be "on call" (and did not volunteer to pick up the tab). If you don't mind their young-hipster marketing, the best deal I found in the US was at Virgin Mobile.

Right now you can buy a basic phone for $20 and, if you sign up for auto payments with your credit card, you only have to add $15 to your balance every three months. (Without the auto payment, it's $20). That's $5/month (or $7). Minutes are 25-cents/minute for the first 10 in a given day, 10-cents/minute after. Incoming text messages are free, outgoing are 10-cents each. No taxes, no extra surcharges, no roaming fees. Charges are taken out of your account balance. The account balance rolls over indefinitely (up to some maximum like $150). If you're like me and don't use the phone every day, your balance adds up so even if you use the phone a lot in a given month if you do not drain your balance you don't pay extra.

At the time I was looking there was no competition. Some pre-paid plans had your minutes expire after a short time. Others had a per-day charge (which Virgin offers if you want a lower per-minute rate, but it's not required). Now it seems that some of the other wireless companies are offering similar deals, but I haven't found anything better yet. If you have information about other deals, add a comment!

Update #1: Looks like Virgin is changing its charges for text messaging. Starting 15-Mar-06 14-Jun-06 it'll be 5-cents to send a message and 5-cents to receive a message.

Update #2: Virgin's rates have completely changed. Read my update.