I have a question about our phone bill. Is it worth it to pay for the inside wire maintenance service? I have never used this service and our phone company is now increasing the charge to $2.55 per month. Also, I am looking for advice in choosing long distance companies. My husband and I both live out-of- state from our relatives and are always looking for ways to save money on phone bills. I have tried several different companies, but it doesn't seem that the savings are significant on any of them. Any advice or thoughts would be greatly appreciated! --Karen B.
Karen's not the only one asking these questions. Being an educated consumer on phone services today takes a bit of study. Let's take a look at what choices Karen has.
First the wire maintenance service. Your local phone company is responsible for providing service to your home. You're responsible for the cost of any repairs from the service drop to your individual phone jacks. So what does maintenance service cover? It is a form of insurance. You're paying $2.55 per month instead of paying for a repair bill if repairs become necessary.
Typically you only want to buy insurance for losses that you can't afford if they should occur. A fire in your home is a perfect example. So how much could a service problem inside your home cost? Our local phone company charges $35 for a service call plus $46.50 for the first 15 minutes and an additional $13.50 for each 15 minutes thereafter. As you can see, it doesn't take much to get to a $100 plus bill.
But phone cables rarely break and most phone work is really pretty simple. Typical do-it-yourself type of stuff. It's just a matter of running a cable from point A to point B. There are either two or four color coded leads to connect. Sure there are some do's and don'ts you'll need to learn We won't get into how to do it here, but with a few precautions and minimal tools, it's a job that most people can tackle. If you do the repairs yourself you'll only spend a few dollars on cable and jacks at your home center.
If you're not handy you'll need to decide whether you would rather pay the $2.55 each month or risk a possible bill if a problem occurs. If you have some savings built into your budget that repair bill won't be a catastrophe. If you don't have that cushion it might be wise to pay the monthly charge.
Now for one of the top ten questions of the ninety's..."what should I do about long distance?" Much as I'd like to be able to say that one company is cheaper than another, it wouldn't be true. There is no one company that is cheapest under all circumstances.
During the day, MCI is cheapest of the large companies at about 19 cents per minute. AT&T and GTE range from 27 to 30 cents per minute during the days.
But if work during the day and do most of your long distance calling in the evenings, you might want to check out Sprint. They charge 10 cents from 7 pm to 7 am. But again, check your pattern. Sprint's daytime rate is 25 cents per minute. Not the cheapest option for day calls.
If you find that you 'talk' to a lot of answering machines you should also pay attention to the billing increment. That's the minimum time increment charged. Most companies charge in 60 second increments. That means a 10 second call is billed as 1 minute. A 61 second call is billed as 2 minutes. Some long distance service providers now bill in increments as low as 6 seconds.
The only way to know what's best for your family is to do a comparison of your actual phone bills. Pick a couple of typical months. Call the different services and ask them to calculate what's the best plan that they can offer you.
Many are offering special promotions for new customers. You might find it best to sign up for one of these introductory rates. Then when the special period is over, review the competition again.
Finally, keep phone bills in perspective. Going from worst to best will only save you about 30% of your long distance bill. Being conservative in how many calls you make and how long they last could save you 100% on some calls!
Here are phone numbers for some long distance providers:
LCI International 1-800-524-5664
Gary Foreman is a former financial planner and purchasing manager who currently edits The Dollar Stretcher.com website and newsletters. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report and he's a regular contributor to US News Money and CreditCards.com. You can follow Gary on Twitter or visit Gary Foreman on Google+.
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