How to Cut Your iPhone Bill in Half

Your cell phone doesn’t seem like one of your biggest expenses, but it is! On average having an iPhone costs you about $3,000 over a two-year plan. This is assuming your actual phone is $199 plus tax, taking your activation fee into account, and spending about $110 a month on talk, text and your data plan…with no overage charges! (because those will cost you a lot more).

The Idea

The phone part of having an iPhone is actually not your biggest cost, although it may feel like it when you go to make that purchase. Whether you pay $100 or $199 for your phone, in the course of your two-year plan it’s the plan that costs you all your money, not the phone itself.

The Plan:

How carriers work: There are only six U.S carriers that own a network: AT&T, MetroPCS, Sprint, T-Mobile, U.S. Cellular, and Verizon Wireless. Any other cell phone provider that you see (particularly prepaid carriers) buy minutes from these six networks in bulk and then sell them to you at a higher price (although still less than the six would charge you).

StraightTalk Wireless is a prepaid carrier owned by Walmart. They buy their minutes in bulk from AT&T. This means if you have service through StraightTalk, you actually have service though AT&T, . All of your calls, texts, and data are routed over AT&T’s network, even though you’re paying StraightTalk.

Phone compatibility:

Prepaid carriers don’t usually sell iPhones, that’s not their target market, but they do provide SERVICE to iPhones.  StraightTalk just started selling iPhones this year, but you still have to pay much closer to full price if you go this route. Normally if you don’t buy your iPhone through a carrier you end up playing the full $649 retail instead of the $199 the carrier sells it for.

Even if you buy your phone at a high retail price, you will still save money over the two-year contact. If you don’t need a brand new phone, consider buying a refurbished iPhone 4 or 4S and that will save you about $200 off retail price.

The Idea in action:

Here’s what to do if you want spend half as much as everyone else on your iPhone bill:

• Purchase your refurbished iPhone (currently $479.99) from Newegg.com. While you don’t get an Apple warranty this way, it’s still cheaper than paying retail. If your phone does break, you just pay Apple $199 for an out-of-warranty-replacement. This still saves you about $170.
• Order a StraightTalk AT&T Compatible Micro SIM card from straighttalksim.com ($14.99). You need to put this SIM card into the iPhone to activate service and get it to actually make calls.
• Buy a 180-day unlimited service card for StraightTalk ($249.99). This averages out to $41.67 every 30 days and roughly $1,000 for the 2 years of service. You can order this at Walmart.com and they’ll deliver it to your email.

Hack Math:

• $999.96 for almost two years of service (this is the 180-day service cards at $249.99 each)
• $479.99 for a refurbished Apple iPhone 4s
• +$14.95 for initial SIM Card
• $1,494.90 total for an iPhone plus 2 years of talk, text, and data from StraightTalk Wireless

Normal iPhone Math:

• $215 for an iPhone plus tax
• $36 activation fee
• +$2,750 approximate average for two years of an average iPhone plan
• $3,001 Total for an iPhone plus two years of a plan from a major carrier

My boss, Brad from BradsDeals has been paying less than $50 a month for his iPhone for the last year. If you want more hacks on shopping, travel, and personal finance, check out our new book Do More Spend Less.

This guest post was written by Kathryn Denton. You can follow Kathryn on Twitter here.

For more helpful tips, check out our full collection of tutorials by visiting our How-To category!