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When reaching out and touching someone gets expensive. Cell phones are no longer one of life’s luxuries, but a staple of our society. It is estimated that worldwide there are anywhere from 1 billion to 3.3 billion cell phones in use. Technology has added applications and features to our phones that many of us could not ever have imagined. Currently, we can text-message, download music, view movies, access the Internet, map out a destination – and more. In the future, applications will become common that are currently improbable. Yet all that convenience comes at a price, and sometimes what we think we are agreeing to pay for becomes more than we have anticipated. Enter the cell phone contract. Negotiating a good cell phone contract begins even before you purchase your phone. Most of us are bombarded by advertisements of the new “must-have” phone, and before we know it, we could be signing up for services that carry a hefty monthly fee.

Ask yourself what services you really need and how your phone will be used. Consider a basic plan and phone if you determine the primary use is personal. Next, analyze which companies support specific phones. Six of the large cell phone companies post their service agreements on the Internet: Verizon, AT&T Wireless, T-Mobile, Sprint PCS, Alltel and US Cellular. Need more than the basics? Now you’ll need to do your homework to determine your actual needs. When choosing a cell phone plan, think about how much you will actually use your phone. Usage is the basis of every cellular phone contract. The more minutes you need, the higher the cost. Typically, the major carriers offer plans ranging from 300 minutes a month up to 5,000 minutes. There are seven tips for negotiating a cell phone plan, according to an article, Tips for Negotiating Good Cell Phone Contracts, by Gary Gresham:

Understand how many unlimited anytime minutes are in the plan and the types of calls that apply.

-Be aware of all roaming, overtime and extra charges.

-If you will be using your phone to make a lot of long-distance calls, make sure your contract includes a nationwide plan with free long distance.

-Determine the boundaries of your local calling area.

-If you are considering a two-year cell phone contract, understand how much it may cost should you want to terminate early.

-If your current contract is not up or you are merely interested in purchasing a new phone, it is not necessary to sign a new contract. However, you may not be entitled to discounts that may be offered with a new contract.

-Consider purchasing an extended warranty or insurance, which can save money if your phone is lost, stolen or damaged.

It goes without saying that before you sign any contract, you need to know how everything works to avoid surprises when you get your bill.
So what happens if you sign a contract and soon find you are not happy with the service and want to switch? You may have a few options. If you act quickly, within the first 30 days of signing your contract, you may be able to cancel without the early penalty. This applies to contracts signed with one of the big four carriers

– AT&T Wireless, Sprint Nextel, T-Mobile and Verizon Wireless. Miss that date, and you could be faced with a hefty early-termination fee of $175 or more.

According to a Consumer Reports January 2008 cell-phone service survey, cell carriers are getting more consumer-friendly. In late 2007 most carriers pledged to prorate their hefty earlytermination fees and end their heavy-handed practice of mandatory contract extensions when you make changes to your service plan. Another option that may be available is to transfer your contract to another person, as long as that person passes a credit check. At Web sites such as www.celltradeusa.com and www.cellswapper.com you can list your provider, how long you have left on your contract, your phone and its available accessories in hopes the combination will attract someone looking to “swap in” to a short-term deal without an activation fee. This service may charge you about $20 to match you with a person who will assume the remaining portion of your contract. One potential drawback to trading away your contract is that you may have to forfeit your phone number. Suppose you are happy with your plan and you do not want to terminate service. Should you still beware? Yes! You may receive a mass mailer from your provider about changes to your contract. Usually you will have a couple of weeks to opt out without paying a fee, so read the fine print. But remember that loopholes cut both ways. If you modify your contract, be sure the carrier does not extend your contract because of the changes.

By now, you could be asking yourself, do I need a contract? Perhaps not. If you have met your one- or two-year contract obligation, your contract could become a month-to-month agreement with no early-termination fee. Additionally, you may want to check with a potential carrier to learn whether paying full price for a new handset entitles you to a monthly service plan and avoid having a contract term or termination fee. Whether or not you choose a contract, be aware of the potential costs and commitment. Managing your phone costs takes time and some work, but it’s your money, so use it wisely.

Written by MICHELLE ODONA