How to choose a cell phone plan: a 7-step method that works

Cell phone plans are designed to be hard to compare. Prices change with the number of lines, autopay discounts and promotions, and the same carrier sells several brands. The result is that most people pick on the headline price and find the real bill higher. A better way is to decide in a set order: coverage, then how much data you use, then the true cost and finally the extras. Here are seven steps that keep you from paying for things you do not need or settling for a signal you cannot use.

Step 1: check coverage where you actually go

Coverage beats price. Write down the places you spend time: home, work, school, the route between, and places you visit often. Look at each major carrier's coverage map, but treat the maps as a guide, because they show where service should work, not what it is like indoors. Ask neighbors, coworkers and family which carrier works well at your address. Low-cost brands usually run on one of the big three networks, so a budget plan can have the same coverage at a lower price. See what an MVNO is for how that works.

Step 2: measure how much data you use

Look at your last three months of usage in your phone's settings or your carrier app. Do not guess. Most people who use Wi-Fi a lot need far less than they pay for. Add a buffer of about 20 percent and decide whether you need unlimited. Read how much data you need for a guide to the numbers.

Step 3: decide how many lines and who is on them

• Count every phone, tablet, watch and hotspot you want on the plan.
• Check the per-line price at your exact number of lines. Prices often drop at two to four lines, then may change.
• Ask who pays and who owns the account. A shared bill is cheap, but it ties people together.
• Decide whether children need a basic plan with parental controls.

Step 4: pick the type of plan

For the trade-offs, read prepaid vs postpaid.

Step 5: compare the real monthly cost

Step 6: read the fine print

• Deprioritization: after a data level, you may be slowed on busy towers.
• Video and hotspot limits: unlimited can mean standard-definition video and a small hotspot.
• Price locks and increases: some plans promise no price rise for years, and others raise prices with notice.
• Device terms: a phone locked until paid off, and credits that stop if you leave.
• International and roaming: check Canada, Mexico and other countries if you travel.
• Cancel and switch rules: any early termination fee or balance due.

Step 7: test before you commit

The best coverage check is to try the network. Many prepaid brands and carriers offer a cheap SIM, a free trial eSIM or a short money-back period. Use it for a week at home, work and on your commute, with your own phone. Check calls, texts and speed. Do not move your number until you are happy. Your old plan stays active while you test, so you lose nothing. If your phone is unlocked and compatible, switching is simple, and if not, check first with how to check carrier compatibility.

Perks that are worth paying for, and ones that are not

• Often worth it: Wi-Fi calling, good international options if you travel, a generous hotspot if you tether and a plan with priority data if your area is crowded.
• Maybe: streaming bundles, if you would pay for those services anyway.
• Often not worth it: phone insurance that costs as much as a repair, extra cloud storage you can buy cheaper elsewhere and premium tiers for features you do not use.

For insurance, see whether phone insurance is worth it.

When you are ready to switch

Pick the new plan, keep the old one active and follow the order in how to switch phone carriers: check your phone is unlocked, get your account number and transfer PIN, start the new service with your number and then cancel the old one. If the phone is on a payment plan, check the balance, because it becomes due when you leave. For ways to cut cost on any plan, read how to lower your phone bill.

Common mistakes when choosing a plan

• Choosing on price without checking coverage at home.
• Paying for unlimited when you use Wi-Fi nearly all day.
• Forgetting that a free phone is tied to a 24 to 36 month commitment.
• Ignoring taxes and fees, so the bill is higher than the ad.
• Switching before checking that the phone is unlocked and compatible.
• Canceling the old service before the number has moved.

Prepaid or postpaid?

Postpaid plans bill you after the month and usually include phone financing and perks. Prepaid plans are paid in advance, often cost less, need no credit check and have taxes included in many cases. The trade off is fewer perks and, on some networks, lower priority when towers are busy. For many people who own their phone, prepaid saves real money each year.

Smaller carriers on the big networks

Brands like Visible, Mint Mobile, Cricket, Metro, US Mobile and others run on Verizon, AT&T or T-Mobile towers. Coverage is the same network, but data may be slowed first during congestion. They are often the best value for one or two lines. Check which network a brand uses before you compare it.

Taxes and fees

The advertised price is not always what you pay. Postpaid plans add taxes and fees that vary by state, and some carriers add a monthly line access or administrative fee. Ask for the total monthly price with everything included before you sign up.

Will your phone work?

To bring your own phone, it must be unlocked and support the new carrier's network bands. Every carrier has an online compatibility checker that uses your phone's IMEI. Find it on iPhone in Settings › General › About, or dial *#06# on any phone.

Discounts worth asking about

Major carriers offer plans for customers 55 and older, military and veterans, first responders, teachers and nurses in some cases. Some also discount lines when you bundle home internet. These can cut a bill noticeably, so ask even if they are not advertised.

Review your plan once a year

Carriers change plans and prices often. Once a year, compare your bill and usage with current offers, since newer plans often give more for the same price.