Hidden Fees When Buying a Cellphone Service
Activation Fees
Explanation
Most cellphone providers charge an activation fee when you start a new service or add a new line. This can range from $20 to $50 per line. It’s meant to cover the cost of setting up your account and provisioning service.
Probability to Save
MediumWhy and How
Activation fees are sometimes waived during promotional periods or for new customers. If you’re a returning customer or if you’re switching providers, try asking for a fee waiver or special promotions. Also, self-activating through the provider’s website or app might help avoid this fee.
Equipment (Phone) Fees
Explanation
When buying a new phone through a provider, you might face monthly equipment fees or charges for the phone itself. This could range from $10 to $50 per month depending on the phone model and the payment plan you choose. The total phone price may be split into installments (e.g., 24 months).
Probability to Save
MediumWhy and How
You can avoid monthly fees by paying upfront for the phone instead of financing it. Alternatively, if you already own a phone, check if you can bring your own device (BYOD) to the provider to avoid extra equipment charges.
Early Termination Fees (ETF)
Explanation
If you sign a contract with a carrier (usually for 2 years), you may face an early termination fee (ETF) if you cancel the service before the contract ends. This fee could range from $150 to $350, depending on how long you’ve been using the service.
Probability to Save
LowWhy and How
ETFs are generally non-negotiable, but they may decrease as the contract term progresses. If you're unhappy with the service, contact customer support and explain the situation — you might be able to negotiate a reduced ETF or find a way to transfer the contract to another person. Avoid ETFs by choosing no-contract plans or prepaid services.
Data Overage Charges
Explanation
If you exceed the amount of data included in your plan, you might be charged overage fees. These can range from $10 to $15 per additional GB of data, depending on your plan.
Probability to Save
MediumWhy and How
To avoid data overages, track your data usage and set up alerts through your provider’s app or website. If you tend to exceed your data limits, ask if you can upgrade to a higher data plan that fits your needs. Some providers also allow you to purchase additional data packs at a lower rate, which can be a good alternative to high overage charges.
Roaming Charges
Explanation
If you use your phone outside your provider’s network area, whether in another state or country, you may incur roaming fees. These can range from $0.25 to $2 per minute for voice calls or $5 to $15 per MB of data.
Probability to Save
Low to MediumWhy and How
Check your plan to see if it includes free roaming or international coverage. For international travel, you can often purchase an international plan or add an international data package to avoid high roaming fees. Some providers also offer free roaming in certain countries, so research your destination before traveling.
International Call Fees
Explanation
Making international calls outside the U.S. can result in extra charges, ranging from $0.10 to $5 per minute depending on the country you’re calling.
Probability to Save
MediumWhy and How
If you frequently make international calls, ask about international calling plans or discounted packages for specific countries. Some carriers also offer global calling cards or Wi-Fi calling (which allows you to make international calls over the internet, often without extra fees).
Device Upgrade Fees
Explanation
If you’re upgrading your phone through your provider, some companies charge an upgrade fee, which can range from $25 to $50.
Probability to Save
LowWhy and How
You can avoid this fee by buying a phone outright from the manufacturer or a retailer, or opting for a third-party financing option. If you’re on a financing plan, check if the upgrade is tied to any contract or if the fee can be waived based on your customer loyalty or history with the provider.
Activation Fees for Adding Lines or Features
Explanation
When you add a new line or additional features (e.g., a data plan or phone number), some providers charge an activation fee. These fees range from $10 to $40 per line.
Probability to Save
MediumWhy and How
Before adding extra lines or features, check for promotions or bundled offers that waive these fees. You can also ask if there’s a discount for upgrading or adding new features during the first month of service.
Service Fees for Customer Support
Explanation
Some providers charge a service fee for phone support or technician visits, which can range from $25 to $75.
Probability to Save
LowWhy and How
These fees are often non-negotiable, but you can avoid them by troubleshooting problems using the provider’s online help tools or chat support. If you absolutely need a technician, ask if there are any waivers or discounts available.
Monthly Device Protection Plan
Explanation
Cellphone providers often offer device protection plans that cover repair or replacement if your phone is damaged or stolen. These plans can cost $10 to $15 per month in addition to your regular service plan.
Probability to Save
MediumWhy and How
If you already have phone insurance through another provider (like your home or auto insurance), you can often opt out of the protection plan. Alternatively, some credit cards offer phone protection when you purchase the phone using their card, so check your benefits before committing.
Additional Line and Family Plan Fees
Explanation
When signing up for a family plan, the base rate might seem reasonable, but providers often charge extra for each additional line. Fees can range from $10 to $40 per line each month.
Probability to Save
MediumWhy and How
Consider a prepaid plan if you have multiple lines or are on a tight budget. If you already have a family plan, ask if there are discounts for multiple lines or if there are any promotions that could reduce the cost per line.
Taxes and Regulatory Fees
Explanation
Like cable services, cellphone providers often charge various taxes and regulatory fees, such as FCC fees, state taxes, or 911 fees. These can range from $2 to $10 per month, depending on your location.
Probability to Save
LowWhy and How
These are mandatory and generally non-negotiable, but you can avoid higher fees by opting for tax-friendly plans or prepaid services. Some states have lower taxes on mobile services, so it’s worth checking if you’re in a tax-friendly area.