How important are our smartphones? Just consider how much we spend on them. The average American household shelled out more than $1,500 on phones and phone service in 2012, and the biggest spenders easily blew through twice that amount.
Overall, spending on wireless services was up by 7 percent over 2011, even though many households cut just about every other expenditure they could.
Part of that spending spree came as owners of basic cellphones continued to trade up to their first smartphones, those Web-connected combinations of phone, mini-computer, and micro-compact camera. About 70 percent of Consumer Reports readers who responded to its annual survey on cellphone service now own a smartphone, up from about 50 percent two years ago.
Consumer Reports offers ways to save — and be more satisfied, too — no matter what phone and plan you choose.
How to Save
The plan you pick and the cellphone retailer you choose are likely to affect your cost of owning a particular phone far more than the price of the phone itself.
Haggle for the phone. Most shoppers don’t think to negotiate for a lower cellphone price, but 17 percent of the survey respondents took a shot. Of that group, more than one in four succeeded.
Consider a prepaid phone plan. A no-contract plan is now worth serious consideration. Phones are better, reader satisfaction with prepaid service is relatively high, and service costs are lower.
Be careful when upgrading early. Unless you’re totally fed up with your current phone, try to stick with it until the contract runs out. If you upgrade early, you’ll be hit with penalties and surcharges, including paying full price for the new phone.
Think twice about insurance or an extended warranty. It can easily cost $500 to $600 to replace a popular smartphone in mid contract, as salespeople pushing protection plans will remind you. But in the survey, Consumer Reports found that only 15 percent polled bought a new phone because the old one broke. Only 2 percent bought one because their phone was lost or stolen.
Based on that, the value of insurance or extended warranties seem questionable. That’s especially true when you consider what a plan costs and what you get for the money. Phone replacement coverage can cost $5 to $9 a month and can come with a $50 to $150 deductible. Yet you might be entitled only to a repaired, refurbished phone rather than a new one.
Even so, close to one in three survey respondents purchased additional protection against loss or damage to their phone. Many said they felt it necessary to protect their investment in the phone.
Here’s a better idea: Keep your old phone until the new handset’s contract ends. If you lose or break the new phone, reactivate the old one by contacting the carrier and then syncing to your accounts to download contacts and more to the device. Then use the old model until you qualify for a free or discounted new phone.