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Why Are Cell Phone Plans So Expensive?

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May 12, 2021

It’s no secret that cell phone plans are expensive. According to J.D Power, the average cell phone plan costs a whopping $70 per month for individuals. This adds up to $840 per year, just for one person’s cell phone needs. For families, the average cell phone plan can be $1,188 and even higher into the thousands depending on how many lines you have. 

These costs don’t even factor in data overage fees or the cost of purchasing a new cell phone to replace older models. But what makes cell phone plans so expensive, and are there ways to lower these expenses?

The bad news is, almost all cell phone plans calculate your cost based on the same factors. The good news is, there are many ways to save on these costs, and find the best plan to save you money.

Factors that affect your cost

Before we talk about how to lower your cell phone plan, let’s talk about the factors that make it so expensive.

How many lines are on your plan 

The largest factor that determines the cost of your cell phone plan is how many lines are on it. It can cost up to $50 to add another line to your phone plan, so if you have a family plan, your costs can be well over one hundred dollars per month.

Even though cell phone plans get more expensive with the more lines you add, there is a silver lining. Adding everyone to the same plan does save you money in the long run. A family plan that covers unlimited data for four people would be cheaper overall than four individual plans with unlimited data.

So, if you and your partner are on separate cell phone plans, consider joining and getting a multi-line plan to save money!

How much data you have 

When you sign up for a cell phone plan, you get to choose how much data you want, and this is a determining factor in your cost per month. Cellular data is the amount of data (downloading and uploading) your phone is allowed when it’s not on Wi-Fi. For example, when you make a phone call in your car or use your phone in a public area and are not connected to Wi-Fi, you are using cellular data.

While data is an important part of your cell phone plan, many people overpay for data that they don’t even use. In fact, the average amount wasted on unused data is $200! This could be why your cell phone plan is so expensive.

To avoid overpaying on your cell phone bill, it’s important to know how much data you use each month so you can only buy what you need! Here are some ways to figure out how much data you need.

Keep track of your data

On an iPhone, open up the settings app and click on the “cellular” option. Once you open this page, each of the apps on your phone will be listed in alphabetical order with a number representing the amount of data it has used next to it.

Now, be careful. This number is not how much data you’ve used that month. It is actually how much data you’ve used since you last clicked the reset button. If you’ve never reset your cellular data tracking, then it’s how much data you have used since purchasing your phone.

The reset button is located at the bottom of the page. If you haven’t reset the button since getting your phone, wait until your cell phone plan renews and then reset your cellular data tracker in your settings! This way, you can restart the count for how much data your apps have used and keep track of what you need each month. You may find that you pay for more data than you use!

Calculate how much data you need

While you’re keeping track of your data throughout the month, you can also use this helpful guideline to determine your data needs. Here are the average amounts of data used by various activities and apps:

  • 1 email sent with no attachments - 20 KB
  • 1 email with attachments - 300 KB
  • Downloading 1 song - 4 MB
  • Uploading on1e photo to social media - 5 MB
  • 1 hour of surfing the web - 15 MB
  • 1 hour of streaming music - 72 MB
  • 1 hour of standard definition video - 1 GB
  • 1 hour of HD video - 2.5 GB
  • 1 hour of 4K video streaming - 6 GB

Depending on which activities you do more, you should purchase your data plan to meet your needs!

What kind of phone you have

Having the latest tech gear is exciting, but it could also be the reason why your phone bill is so expensive. When you pay for a new mobile device monthly, it’s often factored into your cell phone bill. This could add a hefty amount each month until your phone is paid off.

Other hidden fees

There are other hidden fees that can cause your cell phone bill to skyrocket as well. A promotional discount may have ended which can cause your bill to go back up. You may also be breaching your data cap each month, resulting in data overage fees and slower service.

In addition, there can be fees for cancelling your plan early that can reach up to $350 to cancel your phone plan. You can also be charged for activating a new phone and roaming on cellular data if you use your phone inside or outside the US!

5 tips to lower the cost of your cell phone plan 

Now that we’ve been over which factors affect your cell phone plan the most, let’s talk about ways to curb these costs and get the lowest cost for the most data and coverage!

  1. Stay on Wi-Fi as much as possible

One of the easiest ways to decrease your cell phone cost is to use data as little as possible. You will need cellular data when Wi-Fi isn’t available but taking advantage of Wi-Fi when it is available can be a great tool to save money!

When you’re at home and on your phone, make sure your device is connected to the internet. Most people assume their phone connects automatically, but double checking can save you from using up all your cellular data when you think you’re on Wi-Fi.

In addition, when you’re in public or at a friend’s house, ask to use their Wi-Fi. Most restaurants and coffee shops offer free internet access and post their password to have it for anyone to use.

  1. Watch standard definition videos

If you love watching TV and movies on HD, don’t worry! Not every video you watch has to be on standard definition or lower quality. Simply be selective about what you stream on HD and what you stream on SD.

For instance, if you’re watching a rerun of a show you’ve seen hundreds of times, maybe watch it on SD this time. If a new Stranger Things season comes out and you want to host a watch party, go ahead and watch it on HD.

  1. Download your favorite playlists and albums

Another easy way to save data and lower your cell phone plan cost is to download the music you listen to every day. Whether you have a morning commute playlist, a workout playlist, or a favorite album to fall asleep to, download them!

By downloading them, you only use cellular data one time while letting yourself enjoy them as many times as you want data-free!

  1. Close your apps

If you leave your apps open when you close your phone, they could still be preloading videos and loading content, even if your phone is off. This increases your data use and uses up the phone battery.

To prevent this, close your apps whenever you are done with them. You can do this by swiping up on the app and exiting out of it instead of just returning to your home screen.

  1. Shop for a new plan

Sometimes, your cell phone provider is just not the right fit for you. If you’ve tried everything else, and nothing seems to be lowering your cell phone costs, consider shopping for a new provider. While there may be termination fees for ending your contract early, you can always look around with other providers, wait until your contract renews, and then switch.


Cell phone plans may seem like an expensive luxury that you’re scrambling to afford, but thankfully, there are ways to keep your costs low while still staying connected to those you love and enjoying the internet! Understanding which factors determine your plan’s cost and tips to minimize your data and overage fees can help you lower your cell phone bill!

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