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Credit cards offer convenience, security, and rewards. Overspend with a credit card, however, and the interest and fees can bury you. Here are 10 tips to stop using credit cards.

stop using credit cards

If you’ve got a bad credit card habit, chances are you know it. Whether or not you’re willing to admit it is a whole other story. But admitting you have a problem is the first step to making changes.

If you can answer yes to any or all of these questions, you need some major changes:

  • Do you pay interest fees when you send in your credit card payment?
  • Have you ever paid your credit card late because you didn’t have the money for the payment?
  • Do you use your credit card when you don’t have enough cash?
  • When your issuer raises your credit limit, do you spend more because you can?

Credit card companies just love credit card users like this. They pay interest and late fees. They spend more on their credit cards, too.

This means credit card companies can charge merchants for more transactions. Altogether, these credit card users are the ones who are putting food on the table.

And putting more money in the pockets of credit card issuers means you’re putting less money in your own pocket. So the goal should be to stop these bad credit card habits. Instead, work to get to a place where you can use credit responsibly. This means taking advantage of rewards programs but never paying interest or fees.

Don’t think you can do it? Think again. Take these ten steps to systematically break your bad credit card habits.

1. Look at your spending carefully

Deep down, maybe you know your credit card habits have come about because you’re spending more than you earn. And this is a self-perpetuating issue. Once you get stuck in the cycle of paying interest and fees, it becomes harder and harder to get back to spending less than you earn.

So your first step is to track your spending faithfully. You can do this on a pen and paper. Or an Excel spreadsheet. Or you can use a program like Mint.com that will automatically import your transactions.

The key here is to total up all of your spending from all sources–credit cards, checking account, savings, and cash. Keep this up for at least a month, and you’ll see where you’re spending money you shouldn’t spend. Keep it up for multiple months in a row, and you’re likely to find that you automatically reduce your spending.

2. Create a new budget

Once you’ve tracked your budget for a month or two, you can see what you are spending versus what you should be spending. Now it’s time to actually create a new budget. This budget should be based on the money you actually make each month.

Again, you can do this in different ways. You can stick to cash-only spending. Or you can use a program like Mint to track where you stand in various budget categories. Either way, you’ll need to use discipline to make sure you stick to your budget. The best way to do this is to cut back on spending slowly, particularly in essential areas like groceries.

Try to take your grocery spending from $500 per month to $200 per month overnight, and you’ll probably fail. But you can succeed by cutting just $20 per week from your spending. Keep doing this until you reach a comfortable, but frugal, level of grocery spending.

You can do this with other areas of your budget, too. The key is simply to budget for what you need and then stick to the budget. This will be more possible if you consistently check in on your spending. Make this a habit, and you’ll find you’re more likely to stick to your budget.

3. Build an emergency fund

This step can take some time, especially if you’re in the habit of overspending rather than saving. But find places where you can stash back even $10 per week. Over time, you’ll build up a pad of savings that can help you in an emergency.

Start by opening a high-yield savings account. Then, begin with the first goal of putting about $1,000 into the emergency fund. Sure, you’ll eventually want to save three to six months’ worth of expenses. But this can take a really long time. Starting with this smaller goal lets you be prepared for minor emergencies, which can help you cut back on credit card spending.

Remember: an emergency fund is to be used in true emergencies only. This doesn’t take the place of your credit card. The purpose of the emergency fund is to remain untouched for regular expenses but accesible when major spending is required. Some examples might be the loss of a job or a significant medical expense.

For more details, see Five Components of an Emergency Plan, but ignore component number four.

4. Stop using your credit cards

Building up an emergency fund is essential for this step to start working. If you’ve consistently used your credit card for minor emergencies, you’re relying on it too much. When you have a bit of money in savings, you can reduce your credit card dependency. And this can let you stop using your credit cards.

Now that you’re living on a budget, you should not need to rely on your credit cards anymore. Instead, you should only be spending the money that actually comes into your bank account each month.

So stop using your credit cards. You might want to take baby steps here. Start by simply leaving the cards at home all the time. Then remove them from your PayPal account and other automatic online payment options. Then, start shredding them, which will lead you to the next step.

5. Destroy your credit cards except for one or two

You can play this one of two ways. If you’re disciplined enough, you can simply destroy the physical credit cards and remove them from your online accounts. This means you’ll stop spending on the cards but won’t actually close the accounts. This is because closing old credit card accounts can actually damage your credit score.

But if you have a serious problem, this may not be enough to stop your overspending. Instead, you may need to go as far as actually closing your credit card accounts. Overspending, after all, is a larger issue than getting a better rate on your next mortgage. So if you want to really take away your ability to overspend on credit, you can close the accounts.

However, you’ll only be able to close accounts that have no outstanding balance. You may want to skip to step seven if all of your cards have an outstanding balance.

6. Lock away your remaining credit card

Now that you have one credit card left, realize that you will not be using this card for everyday spending; for now, cash is king. Put your remaining credit card out of sight. Lock it away. I’ve even heard of some people who put their credit card into a cup of water in the freezer. The extra step of breaking a block of ice to get to your credit may be an extra demotivator.

Why keep a credit card at all? You may need it in a real emergency before you emergency fund is fully built up. But making it difficult to access will mean you’re less likely to use it for non-emergencies.

7. Consolidate your balances onto one or two cards

Gather the latest statements for the cards containing balances. Choose one or two with the lowest interest rates, and consolidate your balances onto these cards. By calling the credit card company, you can provide the information for your other cards with balances. Then they will initiate a balance transfer. Ask for a transfer fee waiver. If they aren’t willing to waive the balance transfer fee, consider using a different card to consolidate your balance or apply for a great balance transfer credit card.

Another option is to look at an unsecured personal loan to consolidate your balances. This type of loan can get you into a lower interest rate and help you pay off your credit card debt more quickly. Plus, once you’ve consolidated debt off of some of your cards, you can then close those zero-balance accounts.

What if you don’t have good enough credit or enough available credit to consolidate your debt? In this case, you’ll need to skip to steps eight and nine. You can make this work without consolidation. Consolidation can just make it easier.

8. Enact a cash-only policy

Once you’ve lived without your credit cards on hand for a couple of months, your budget should be in a good place. Now you know what you can and need to spend each month. So now you can enact a cash-only policy.

This doesn’t necessarily mean you have to spend physical cash. But that can be a good idea. Spending cash actually helps you spend less money. But spending cash can also be unwieldy at times. So another option is to keep cash on-hand for certain expenses, such as groceries, but to use your debit card for other expenses.

The key is that you have to actually have the money in hand–either physically or in your bank account–to spend it. Getting into the swing of this can be difficult. But, trust me, it’s worth the learning curve. Once you start spending only what’s coming in, you can turn your attention to spending less than what you make. And this is how you’ll really start to make financial progress.

9. Pay down your balances

Now it’s time to start reversing the damage you’ve done with your bad credit card habits. You’ll likely need to pay more than the minimum payments on your accounts to start getting out of debt. So use that money that you’ve suddenly found in your now-strict budget to get this done.

There are a couple of different ways to pay down your balances. And, really, either one is sufficient, as long as you keep on keeping on. One option is the Debt Snowball method popularized by Dave Ramsey. This has you start paying off your smallest balance first. Once that balance is paid off, apply its minimum payment and any extra money to the next-smallest balance.

The advantage of the Debt Snowball is that you get some quick wins up front. This can help you stay on track as you work towards paying off larger and larger balances.

The other option is the Debt Avalanche. This has you start with the highest-interest account first. Then pay off lower-interest cards as you move through your debts. The advantage of this approach is that you wind up paying less interest over time.

The Debt Avalanche is the most logical way to pay off your debts. But it doesn’t make a huge difference unless you’re in a lot of debt or have a big differential between your interest rates.

You can check out a more in-depth discussion of these two options here. But, really, the main issue is that you start paying off your debts and keep on with it until your credit cards are paid off.

10. Check your progress each month

Paying off debt takes time and dedication. You’ll need to keep moving forward towards your goals, even when things get tough. One way to keep making progress is to see how far you’ve come.

The best option is to come up with a way to consistently track your balances each month. You’re already checking in on your spending frequently, right? Well, make a chart where you keep track of your credit card balances month after month, and watch as they disappear.

You can do this with some budget-tracking softwares, such as Mint. Or you can create your own spreadsheet for tracking your credit card balances. Either way, be sure you’re checking in at least once a month to keep track of your progress. Seeing how far you’ve come will help you keep moving forward until you finally break your bad credit card habits and reverse the damage they’ve done.

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It’s important to save for a rainy day. In this guide, we give you ideas on where to put an emergency fund and how much you should save.

where to put an emergency fund

The world of personal finance is rife with oversimplified platitudes and one-size-fits-all advice. No where is this more evidenced than in the often-repeated advice about emergency funds.

Typical advice says that you should save three to six months’ worth of expenses in a high-yield savings account. Some financial gurus opt for eight months’ worth of expenses saved up, while others say four is enough.

Still others advocate for starting with a couple thousand dollars and beefing up the fund after you’ve paid off all debts.

How much you should have in an emergency fund and where you should keep it is more personal than this. In some situations, a smaller emergency fund may work just fine. And for some people, a low-interest home equity line of credit can be a reasonable emergency fund. In other situations, having this much cash on hand is a good plan.

But high-yield savings accounts are really providing barely enough to keep up with inflation. Stashing a ton of cash in a savings account may not be the best option. In this case, you might consider having a broader, more diverse emergency plan. This can help you make it through true emergencies without losing out on the interest your money could be earning.

If you’ve never thought through what you’d do in a financial emergency, consider creating an emergency plan that includes the following components:

1. “Mattress cash” stash

Clearly, I don’t actually mean hiding cash in your mattress, necessarily. But it’s not a bad idea to stash a small amount of cash around your home. If your ATM network is down for some reason and you need cash, you can get what’s in your home. I’m not talking about keeping a ton of cash in your home. This should be maybe two or three hundred dollars.

After all, in the case of a truly catastrophic world event, that cash won’t have much value, anyway. So we’re not really planning for that type of situation. This is more the type of situation where you’ve lost your wallet and had to cancel your debit and credit cards. You’re waiting on replacements, but you need to put gas in the car and groceries in the pantry right now. In this situation, you could make a couple hundred dollars work for a week or two.

2. Liquid account

Unless there’s a worldwide banking catastrophe, you should be able to access the next portion of your emergency fund within one day. You might consider putting this portion of your emergency fund into a money market or high-yield savings account. The idea is to earn as much interest as possible without losing FDIC insurance and easy access to your cash.

How much should you put into this fund? It really depends. The idea is that this should be enough to get you through from a job loss to the first paycheck at a new job. Many experts recommend having one to three months’ worth of expenses in this type of account, if not more.

The key here, of  course, is that you’re saving expenses, not your actual income. If you make $4,000 per month but only have to spend $2,000 per month to meet your basic needs, you should use $2,000 as your monthly goal. So for three months’ worth of expenses, you’d only need $6,000 in savings.

Your thoughts for this portion of your emergency plan may differ, depending on your current situation. In a two-income family, for instance, you may not need as many months’ worth of savings. After all, the chances of both working adults losing their jobs at the same time are probably fairly slim. On the other hand, if your particular career suffers from an unstable job market, consider saving even more in this part of your plan.

3. Certificate of Deposit ladder

You can earn a bit more interest on your emergency savings if you use a short-term Certificate of Deposit ladder. With a CD ladder, you progressively invest in more certificates of deposit, which each have their own maturity date. As each CD matures, you can either pull out the money, penalty-free, to cover your expenses. Or you can reinvest it if you’re not in the middle of an emergency.

Combined with liquid savings, a CD ladder can be a good way to get through an emergency without losing out on slightly higher APRs. For instance, say you save three months’ worth of expenses in your liquid account. Then you create a CD ladder of three-month CDs. You’re then guaranteed to be able to tap at least one CD by the time you run out of liquid emergency fund savings. And if you need to keep pulling from the CD ladder, you can.

This way, you can take advantage of potentially higher CD rates, while avoiding penalties for withdrawing from your CDs early.

4. Investments

As you’re planning how to save for retirement, consider potential emergencies, too. In an emergency, you can withdraw your contributions (not your earnings) from a Roth IRA. Depending on your broker, these withdrawals could be free from penalties, taxes, and fees. Once the emergency has calmed down, you can contribute the withdrawals back into your Roth IRA.

You can also consider tapping into your taxable investments, if need be. This isn’t always the best option, especially if your investments are down. But if a true emergency, it can be a way to cover your expenses and potentially get some tax benefits while doing it. Remember, too, that if you sell when your investments are worth more than when they were purchases, you’ll face some tax implications. Just account for that when determining whether and how much to withdraw from your investments.

The best-case scenario is, of course, to have enough in liquid and intermediate savings not to have to tap your investments in an emergency. But understanding how this could potentially work is a good idea when you’re planning how and how much to invest.

One more item of note along these lines: do not rely on a 401(k) loan during an emergency. If you should lose your job, the loan would come due immediately. That just makes an already tenuous situation even more risky.

5. Credit

Using credit in an emergency can be a slippery slope. But it can be used wisely as part of a broader emergency plan.

For instance, if you’re currently paying hefty interest on credit cards, you should put your extra cash into paying them down rather than saving for an emergency. But you’ll want to be sure you don’t go back into high-interest debt if an emergency does arise. In this case, saving a couple thousand dollars to start can be helpful. This can help you get through unexpected car repairs or other smaller emergencies.

Then consider keeping open a home equity line of credit to use for larger emergencies. With today’s lower interest rates, you could finance a longer-term emergency without paying interest through the nose.

Another option is to keep your eyes open for credit cards with an introductory 0% APR on purchases. These cards are widely available to those with good credit. And you can often get one at the drop of a hat. This could get you access to a line of credit in an emergency. Hopefully the introductory offer would give you enough time to get through the emergency and then repay the balance before the introductory period ended. Luckily, credit card issuers are now offering these introductory periods for anywhere from 12 to 18 months, and sometimes more.

6. A bare bones budget

On an everyday, non-emergency basis, you probably have lots of little–or even large–expenses that you could cut out in a true emergency. It’s a good idea to know ahead of time what this would look like. Take a look at your spending for the past three months, and determine which expenses you could have cut with ease and which you could have cut with a bit of work or sacrifice.

This might include things like your cable subscription, other entertainment-related expenses, any dining out expenses, extravagant grocery-related expenses, and more. See just how much you could have cut out of your budget, and put that on paper. That’s your bare bones budget. If you had absolutely no money coming in, that’s how much you’d need to survive.

The exercise of writing down your bare bones budget is helpful for a couple of reasons:

  1. It helps you determine your emergency savings goals. Remember, saving for an emergency is about saving for essential expenses, not your normal, I-have-a-good-income spending. Writing down your bare minimum budget lets you see what you actually need to save for emergencies.
  2. It’ll give you a reference point in an emergency. When an emergency hits, you’ll be too busy looking for your next job or putting out the proverbial financial fires to think too much about basics like budgeting. So having this bare bones budget written down ahead of time can be helpful. You can use this document to know which services to cancel right away and how to budget until the emergency is over.
  3. You’ll see how much extra you’re really spending. Finally, writing down your bare bones budget is great even if you aren’t in the middle of an emergency. It’ll help you see just how much of your daily spending is truly necessary versus extra. While you don’t need to live on this strict budget all the time, it’s a good way to gauge if your spending is reasonable or getting out of control.

7. Stock up on essentials

I’m not advocating becoming a doomsday prepper, but having a stocked pantry and medicine cabinet can make emergencies easier to get through. And it’s not that hard to plan ahead. Just add a few extra cans of beans or other non-perishables to your cart each time you go to the grocery store. Shop in bulk for paper goods like toilet paper and paper towel. And keep your medicine cabinet well-stocked with first aid supplies, over-the-counter medicines, and such. And if you’re on any prescriptions, be sure to keep them up-to-date and refilled as often as possible.

These essentials may not get you through a several month long period of unemployment. But if you can get through the first month or two without having to buy more than milk and eggs from the grocery store, your emergency savings will go a long way. This is just a simple step to take over time so that you can cut expenses at the drop of a hat.

When you think about your emergency plan as more of a comprehensive plan, you’ll feel more prepared for potential emergencies. You’ll also know how to save for emergencies without your savings being eaten away by today’s still-low interest rates. Do you have a broader emergency plan? What does it look like?

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The debt avalanche is the fastest and cheapest way to pay off you debts. But is it always the best way? Sometimes the debt snowball may be better.

debt avalanche

When it comes to math, things are pretty straightforward. No matter what language you speak, one and one always equals two. And, in theory, finances should work this way, too. After all, money is based on math.

Ah, but here is where we run into a problem. Because money isn’t just about math. It’s also about a host of human factors, including our emotions, unexpected circumstances, and even physical state. Have you ever tried to spend less at the grocery store when you’re hungry? You know what I mean!

This is why experts argue about the best way to pay off credit card and other debts. There is actually a mathematically correct way to pay off debt. It’s known, typically, as the debt avalanche. If you stick to it, the debt avalanche is definitely more efficient and fast than the debt snowball popularized by Dave Ramsey.

But following the debt avalanche, even though it’s the “correct” way to pay off debts, isn’t always the best option. First, let’s talk about what the debt avalanche actually is. Then, we’ll talk about when it might not be the best option.

What is a Debt Avalanche?

You probably have already heard about the debt snowball if you’ve read anything in the personal finance space. It’s the idea that when paying off your debts, you should start with the smallest balance debt first. Once you pay off that debt, you put extra money plus that debt’s monthly minimum payment towards your next smallest debt, and so on.

The idea here is that you get a quick win up front by paying off one or two of your smaller debts quickly. This approach doesn’t account for interest rates at all.

The debt avalanche, on the other hand, is all about interest rates. Here’s how to do it:

1. Order your debts from highest to lowest interest rate. Often times, your credit cards will be at the top of the list with their exorbitant interest rates. But you’re not worried about provider or loan servicer. Only the interest rate you’re currently paying counts.

What should you do about introductory rates? It depends. But you might decide to back burner these debts until the interest rate hikes.

For instance, say you’re currently paying 0% interest on a credit card. In 15 months, the interest rate will jump to 17.99%. Right now, just leave the card at the bottom of your to-be-paid list. That’s where it belongs with that introductory interest rate. Just pay attention to when the interest rate rises. Then, you may need to reorder your debt payoff plan to account for the card’s increased interest rate.

Resource: List of 0% Balance Transfer Credit Cards

2. Pay the minimums on all of your debts each month. This is essential. If you can’t pay more than the minimums, at least pay that.

3. Put any extra money towards highest interest debt first. Don’t think you can find any extra money? Check out this list of ways to start paying off debt today. Whatever extra you can scrape together or pull out of your budget goes towards this debt, even if it’s the largest balance debt on your list.

4. Repeat every month. Eventually, you’ll pay off that first debt. Once you do, move towards putting extra money–plus that first debt’s minimum payment–towards the second highest interest rate debt on your list.

It’s really pretty straightforward. The only thing that makes it different from the debt snowball is the order in which you pay off your debts.  So what’s the difference, mathematically, and why is the debt avalanche not always the best method to use, even though it’s the most efficient? First, the math.

How Does the Math Play Out?

If you know anything at all about basic math and interest rates, it’s not hard to surmise that the debt avalanche will be the more efficient option for paying off debts. When you pay down the principal on your highest-interest debts first, you pay less interest overall. And since you’re paying less overall interest, you’ll pay off your debts faster. Sometimes, the difference is significant, but sometimes it’s not.

To run the numbers, we’ll use this calculator.

Let’s say you have the following debts:

  • Credit Card one: $2,500 balance; $70 minimum payment; 18.99% interest rate
  • Credit Card two: $1,000 balance; $25 minimum payment; 10.00% interest rate
  • Student Loan: $15,000 balance; $150 minimum payment; 8.99% interest rate
  • Car Loan: $8,000 balance: $250 minimum payment; 10.00% interest rate

With a debt snowball, you’d pay off your debts in this order: Credit Card two, Credit Card one, Car Loan, Student Loan. With a debt avalanche, you’d paid them in this order: Credit Card 1, Credit Card 2/Car Loan (your choice!), Student Loan.

Since there’s not much difference in order, there’s also not much difference in outcome. It you pay $1,000 per month total towards your debts, you’ll pay them off in 30 months either way. You’ll pay $3,347 in interest with the debt snowball and $3,309 with the avalanche.

So the debt avalanche saves you money, but not a ton. This is generally going to be the case if the method you choose won’t dramatically alter the order in which you pay off your debts.

But what if the method did make a big difference? Let’s look at another scenario.

  • Credit Card one: $7,500 balance; $150 minimum payment; 18.99% interest rate
  • Credit Card two: $500 balance; $25 minimum payment; 9.99% interest rate
  • Student Loan: $15,000 balance; $150 minimum payment; 10.00% interest rate
  • Car Loan: $8,000 balance; $250 minimum payment; 12.o0% interest rate

So under a debt snowball, you’d pay them in this order: Credit Card two, Credit Card one, Car Loan, Student Loan. Under a debt avalanche, you use this order: Credit Card one, Car Loan, Credit Card two, Student Loan.

Let’s also say that money is tight, and you can only put $600 a month towards your debts. In this case, it would still take you the same amount of time to pay them off–74 months. But you’d pay $13,367 in interest with the debt snowball and just $13,143 in interest with the avalanche.

The bottom line here is that these differences will amplify with a bigger spread in interest rates, a larger overall balance, or a longer time taken to pay off your debts. But unless you have huge amounts of debt, the difference may not add up to more than a few hundred bucks in interest.

So is It Really Best?

Here’s the bottom line. The math will always come out in favor of the debt avalanche method. But that doesn’t mean it’s the best method for paying off your debts. In fact, research shows that for most people, the debt snowball method is more motivating and more effective. There’s a reason, after all, Dave Ramsey’s program has been so successful over the years!

With that said, there are some other important factors to consider when making this decision, including:

Whether or not you can refinance your debts. If you have a decent credit score, you may be able to move some of your debts around to much lower interest rates. This is a good move, as long as you don’t use those freed-up credit card limits to rack up even more debt. Refinancing through 0% introductory APR credit cards or personal loans can help even out the math with super high interest debt.

How you drive your financial decision making. If you’re like most people, your money decisions are driven more by emotions than you’d like to admit. Even if you consider yourself a logic-driven person, it’s hard to remove emotion completely from your spending and saving choices. So take this into account, and be honest with yourself. If small wins up front will keep you motivated to pay off your debts, use the debt snowball. If you can stay the course regardless, try the debt avalanche.

Your actual interest rate situation. If you have one debt that has an incredibly high interest rate, while the rest are more average, it’s probably best to pay off that debt first. If you can’t refinance it, just push through and pay it off–even if its balance isn’t as low as some of your other debts. This will free up more money to keep pushing on with getting out of debt, too

So remember, the debt avalanche is the mathematically correct way to pay off your debts. But that doesn’t mean it’s the only answer. The important thing is really that you continue making payments on your debts so that you work towards becoming debt free.

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Comparing cell phone plans makes going to the dentist look fun. To help, here are our ratings and comparisons of the best cell phone plans in 2018.

best cell phone plans in 2017

These days, it’s hard to find someone who doesn’t have a cell phone. They’ve become a staple in our lives. And, for many without a landline, they’re a necessity. But just because we have to have our cell phones, doesn’t mean that we have to pay an arm and a leg for service.

Figuring out how much a new cell phone plan will actually cost you practically requires an accounting degree. Those “$45 unlimited calls, messaging, and data” plans can quickly, somehow, turn into $100-per-line charges. Between fees and fine print, it can all be hard to decipher.

Let’s take a look at how much cell plans have changed recently, all across the board. We will cover the four major cell phone carriers (Sprint, Verizon, T-Mobile, and AT&T). And we’ll see what prices they are actually offering.

We’ll exclude any promotional pricing, since promotions change so often. We’ll also cover the amount and quality of data included in each plan, as that’s the most common concern for subscribers these days.

So, let’s get started. Then, you can determine how much a new plan will really cost you, long before some surprise, inflated bill lands in your inbox.

Big Changes

A few notable shifts that have occurred in the cell phone world as of late. But for the most part, these shifts are in the best interests of the consumer.

Return of Unlimited Plans

You may remember that unlimited plans used to be pretty popular. Different carriers offered different services. Some only offered unlimited talk time, and others offered unlimited talk and text. But you could find some kind of unlimited plan from nearly every provider.

Well, a few years ago, carriers began to unexpectedly pull these types of plans from their lineup. The reason? The massive wave of smartphone users and their unprecedented data usage. This was an even bigger issue once streaming services like Netflix, Hulu, and Spotify gained popularity.

These apps eat up a significant amount of data. To compensate, carriers began to offer expensive data plans alongside their typical “minutes and messages” offerings. Some even forced consumers to pay a fee for simply having a smartphone connected to a line. It didn’t matter if you used 1GB of data per cycle or hit your limit… the fee was the same.

Personally, these “smartphone surcharges” and data fees caused my own bill to jump from an average of $60 per month per line to just over $90 per month per line. We’re talking about another $360 a year per phone, for the luxury of checking my email or Facebook on the go.

You can understand, then, why I jumped for joy when I heard that unlimited plans were making a comeback. I stayed with my same carrier and switched to one such unlimited plan the same day it debuted. This immediately cut my bill by about 35% without any noticeable decrease in service.

All four of the major carriers now offer some form of unlimited plan. Just as before, the plans vary in what’s actually offered. Take a look at your own bill history before switching to see how much data you typically use. Considering that most of the carriers have different unlimited package levels, you may be able to save some money with a smaller plan.

Of course, keep in mind that “unlimited” doesn’t actually mean unlimited without consequences. If you’re a high-speed data hog, you’ll probably have your speeds tethered (or reduced) after you hit a certain usage limit.

No Contracts

Gone are the days of being locked into two-year agreements with a carrier. And consumers no longer have to pay pricey early termination charges if/when they want to switch. Now, all four of the big carriers operate on a no-contract basis.

This is great news as far as flexibility. You’re welcome to change plans and carriers anytime you like, without consequences. However, there is a downside.

One of the biggest perks of contract plans, at least for smartphone users, was the discounted phone price. In exchange for signing one of those one-, two-, or even three-year contracts, the carriers offered a substantial discount on the actual phone. For those who lined up to snag the newest iDevice, this discount of several hundred dollars was well worth the contract’s shackles.

Now, you’ll need to buy your phone outright when you pick that new, no-contract plan… no more $199 iPhones. However, the carriers typically offer their own version of a zero-interest loan, allowing you to buy the phone for a down payment and an agreement of an increased monthly charge.

Once the phone is paid in full–usually around 24 months–that added charge falls off. If you want to switch carriers before you finish paying off the phone, you’ll simply need to fork over the balance in order to release yourself.

Now, let’s look at what each cell company is offering in terms of plans.

Sprint

Sprint has bounced up and down a bit on its unlimited plan pricing over the past year or so. It was one of the first carriers to offer new unlimited plans. Then it dropped its prices significantly earlier this year.

Sprint has raised its prices back up a bit since then. But they’re still nicely discounted from what they were last year and before. However, it’s important to note that the prices shown here are expected to revert back to their higher rates after October 2018. So, be sure to make the switch before then if Sprint is the best choice for you.

Data Quality & Quantity

With Sprint, you’ll have no problem streaming HD-quality videos with your standard unlimited data plan. You’ll also be able to take advantage of 10GB of high-speed mobile hot spot usage per line. This means you can use your cell phone service as a wifi hub for your laptop or other devices, which is a convenient feature to have available at no extra charge. Once you use up your monthly 10GB, your hot spot speed will drop to 2G.

If you use more than 23GB of high-speed data per month, Sprint may tether your speeds. Also, if you are using your data for gaming and music, your streaming speeds will be capped at 8Mbps and 1.5Mbps respectively.

Pricing

Remember rates will jump up a bit, to previous price levels, at the end of October 2018. Until then, though, Sprint has some of the most competitive rates available on unlimited plans.

For one phone line, an unlimited plan will run you $55. A second phone adds another $45, with additional phones after that costing $10 per line.

If you’re not interested in unlimited data–maybe you have a younger child who doesn’t need a smartphone–the only other option available is a $45 per month per line plan. This plan does include up to 2GB of data.

 

1 line 2 lines 3 lines 4 lines 5 lines
1GB data Not available Not available Not available Not available Not available
2GB data $45 $90 $135 $180 $225
Unlimited data $55

(after Oct 2018 this goes up to $65)

$100

(after Oct 2018 this goes up to $110)

$110

(after Oct 2018 this goes up to $145)

$120

(after Oct 2018 this goes up to $180)

$125

(after Oct 2018 this goes up to $215)

T-Mobile

Up until recently, T-Mobile offered family data-sharing options for its customers, called Simple Choice plans. These meant that you could purchase bulk shared data, along with unlimited messaging and calls, for the whole family to use. You could even allocate data to individual phone lines. That way your teenager couldn’t hog all the data midway through the month’s plan.

These Simple Choice plans were also great in that they didn’t include data usage from streaming services, like Netflix and Spotify, against your data allowances. Considering how much data those apps can use, this was a big bonus for many customers.

However, this is no longer the case. Now, T-Mobile has replaced Simple Choice plans with its T-Mobile One plan. Now you have to purchase a separate data plan for every phone on the account.

The good news is that these plans are all unlimited–data, voice calls, and text messages. Depending on how much data your family was eating through before, this could either increase or decrease your monthly bill.

Data Quality & Quantity

Basic T-Mobile plans offer customers “DVD-quality” video streaming. But it caps hotspot speeds at 3G. If you want better quality or higher speed, you’ll need to pay another $10 per month, per line. This upgrade will then snag you a 4G mobile hotspot and HD-quality video streaming.

Whether or not that’s worth the added cost, only you can decide.

As with Sprint (and all of the others, in fact), “unlimited” has its caveats. However, the cap for potential speed tethering is a bit higher with T-Mobile, at a solid 32GB. Surpass that in a given billing cycle, and T-Mobile may slow down your phone’s speed when the system is overloaded.

Pricing

One great thing about T-Mobile’s pricing structure is that it’s incredibly simple to calculate. You don’t have to worry about regulatory fees, taxes, or little monthly charges that can cause your bill to notch further and further up.

What you see is what you get. Their pricing already includes all taxes and fees, so when they say you’ll pay $75 a month, they mean that’s what you’ll actually pay. So, keep that in mind when you’re comparison shopping.

Their price structure is as easy as it gets. There is only one option: unlimited everything. The first line is $75 a month (remember, this is what your actual bill will be… no fees or taxes). Each line after that is another $35. Easy peasy.

1 line 2 lines 3 lines 4 lines 5 lines
1GB data Not available Not available Not available Not available Not available
2GB data Not available Not available Not available Not available Not available
Unlimited data $75 $110 $145 $180 $215

Verizon

Unable to stick with one pricing structure, Verizon has had a lot of back-and-forth with their plans in the last year or so. What they’ve settled on now has a lot of people irked.

Their prices have dropped, and you now have a choice between two unlimited data plans. However, you’ll be getting a little less bang for your buck in the end.

Data Quality & Quantity

Verizon’s plans used to be, like many other carriers, of the limited variety. You could choose until very recently to purchase a set amount of data for a set price. Now, your options are between two unlimited plans, which offer varying qualities of data.

The first plan is called Go Unlimited, and it is the less expensive of the two. You will still receive unlimited data, but Verizon reserves the right to tether you speeds any time the network is busy. This is in stark contrast to most tethering rules, where the carrier will only begin to tether your peak time speeds after you’ve used a certain amount of data.

With this plan, you’ll also get DVD-quality video streaming along with a mobile hotspot, capped at a 600 Kbps speed.

If you need more, well, everything, there is also the Beyond Unlimited plan. It’s an extra $10 a month but offers better quality data and more flexible rules.

With this higher-priced option, you’ll get HD-quality streaming on your videos and a 4G LTE mobile hotspot with up to 15GB per month, per line. You’ll also avoid being tethered during peak network times until you’ve used more than 22GB of data in that billing cycle.

1 line 2 lines 3 lines 4 lines 5 lines
Go Unlimited $80 $140 $165 $180 $225
Beyond Unlimited $90 $170 $195 $220 $275

AT&T

Last but not least, we have AT&T. The carrier started offering unlimited plans again in February 2017, and, like Verizon, it offers two different qualities to choose from.

The company does still offer Mobile Share Advantage (finite data) plans, if that suits your needs better. Grandma probably doesn’t need unlimited data, so these plans are still the cheaper option for low-data users.

Data Quality & Quantity

If you opt for the cheaper of the two unlimited plans through AT&T, the Unlimited Choice, you might be a little disappointed in the quality. It really depends on what you’re used to getting.

Unlimited Choice will give you standard-definition quality (don’t ask me how big of a difference there is between this and “DVD-quality,” though) video streaming with a speed cap of 1.5Mbps. For non-streaming data usage AT&T caps speeds at 3Mbps. The Unlimited Choice plan also does not include a mobile hotspot.

If you need better quality and faster speeds, you can opt for the pricier version, the Unlimited Plus plan. This includes a mobile hotspot with 10GB of usage per line. Go over that limit, and you can still use your hot spot; it just gets limited to a speed of 128Kbps.

This plan includes HBO at no additional cost (which may be a great plus if you’re trying to cut the cord or just decrease that cable bill!) and HD-quality video streaming.

Pricing

The difference in price between the two unlimited plans is larger than with other carriers (most of whom offer an upgrade to the “better” plan for only ~$10 a month per line).

Unlimited Choice plans start at $65 for the first line. The second line is another $60, and each line after that, up to 10 lines, is another $20 per line.

Unlimited Plus plans start at $95 for the first line. The second line is again $60, with each subsequent line adding another $20 per line.

1 line 2 lines 3 lines 4 lines 5 lines
Unlimited Choice $65 $125 $145 $165 $185
Unlimited Plus $95 $155 $175 $195 $215

As cell users’ needs and data demands change, carriers are likely to further alter their unlimited plans. So be on the lookout for changes to these prices and the perks that each plan offers.

Also, keep in mind that cell phone carriers offer promotional pricing and discounts frequently. A number of these carriers offer discounts for autopay and paperless billing, so your bill might actually be less than what you’re seeing here. You should check online and even call the carrier to ask about potential discounts before signing up to ensure that you get the lowest possible price.

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