Cut your cell phone bill

Old-fashioned phone on desk

If you're looking to save money on your phone bill, consider switching to a prepaid cell phone.

Prepaid plans require you to buy a chunk of minutes in advance and may require you to purchase an inexpensive cell phone. Use up the minutes, and you'll need to buy more.

Although prepaid plans start as low as $10 a month, a recent J.D. Power and Associates survey says users spend an average of $37 a month to buy airtime.

They have access to the same basic services you get with a two-year contract that typically costs $60 to $75 a month.

Another advantage: Most prepaid plans don't require a credit check. Most long-term contracts do.

No wonder one out of five cell users have cut back or considered cutting back on their contract service in the past six months, according to a new Millennium Research Council survey.

The phone companies don't promote prepaid plans, because they're less lucrative than long-term contracts that can have profit margins of 50%.

"They barely break even on prepaid," Roger Entner, head of telecom research for Nielsen, told USA Today.

Only about 17% of cell phone consumers currently use prepaid, but the figure is creeping up by a percentage point or two a quarter, thanks to the recession, Entner said.

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