Long ago, I did some research and switched us to a $15/month 200MB data plan from AT&T. I had determined that neither of us ever exceeded 150MB (usually closer to 100MB), so it was an easy decision to switch from the $30 unlimited plan, thereby saving $360 a year (2 * 15 * 12). My wife just generally just uses the phone for email and Facebook, and while I use much more data, it is generally on for free on wifi, hence the low usage.
However, last month, I received a notification from AT&T that my wife had exceeded her data usage of 200MB, triggering an extra $15 charge. I was immediately puzzled – how can someone who uses so little data exceed her plan? When I pulled up the usage on the AT&T app, I saw that she hadn’t gone over by just a little bit – she was already past 300MB, more than half way to the next charge. Huh?
As I dug deeper, I saw that almost all the data usage came from a single day, which corresponded to a day where she stayed overnight at the hospital to be with a sick family member (everyone is okay now). She wasn’t able to sleep, so she had downloaded a whole bunch of podcasts to listen to. It hadn’t occurred to her to do this over the hospital’s wifi network, leading to the sudden surge in data usage, well over the cap.
Okay, no problem. This didn’t represent a major shift in data usage; it was a one-time occurrence. But the fact of the matter is that even if she exceeded her data usage more frequently, I still probably wouldn’t increase our plan size.
The trick in many data plans offered by the wireless companies is that they offer you a lot more data for a small amount of money, enticing you for the higher plan. The rationale is if you go over, you just paid $30 for 400MB, but you could have paid just $25 for 2,000MB. It’s a much better deal, right?
Not really. If you were actually using anywhere close to 2GB, I would agree. However, if you are on the lower end, you are much better off going over your plan occasionally. Let’s say you are usually under 200 MB but go over once every three months. That works out to four overage fees a year for a total data cost of $240 ($15*12 + $15*4). If you went with the $25 a month plan, you would still be paying $300 ($25*12) a year. Sure, you got a lot more data, but the fact of the matter is that you aren’t using it. You would still have been better off incurring overage charges.
I go through the same thing with my texting plan. I’ve become a regular texter, but I got rid of my $10 texting plan once Apple rolled out iMessage. Most of my text messages are to other iPhone users anyways. I still often text with non-iPhone users, but at $0.20 a message, I can send and receive 50 messages and pay no more $10. I’ve learned to not worry about the usage charges I rack up. If at the end of the month it’s under $10, I am clearly coming out ahead. Even if I end up racking up charges over $10, it’s still a better deal, since I have to factor in the savings of all the previous months that I didn’t exceed $10.
There is of course a big counter-argument against this line of thinking: peace of mind. Many people like the comfort of knowing that their bill will always be the same every month, and they find the idea of the overage charges stressful. I understand that.
Just keep in mind that the cell phone companies understand that too. Their costs are the same, regardless which plan you are on. If they can scare you into paying extra for service you don’t actually use, so much the better for them.
Just remember that month after month, those costs are adding up. How much is that peace of mind worth it to you on a yearly basis?