Price Cut on Cell Phones for Seniors: From $7 a Month

Author: Alliance for Generational Equity (AGE), Washington D.C.
Published: 2010/12/22
Topic: Phones and Cellphones - Publications List

Page Content: Synopsis - Introduction - Main

Synopsis: Older Americans can now purchase a senior friendly prepaid cell phone for less than $15 and get service for as little as $7 a month.

Introduction

Main Item

Thanks to a major price war that has broken out among wireless companies, older Americans can now purchase a "senior friendly" prepaid cell phone for less than $15 and get service for as little as $7 a month, according to an analysis conducted by the Senior Advocate Health & Safety Project of the independent and nonprofit Alliance for Generational Equity (AGE), which represents seniors as well as Americans in other generations.

High prices have often been cited by an estimated 13-19 million U.S. seniors for not taking advantage of the health, safety and other benefits of owning a cell phone. In response, the Senior Advocate Health & Safety Project of the independent and nonprofit Alliance for Generational Equity (AGE) undertook a study of phones and plans offered by three leading "pay as you go" cell phone offerings aimed at older seniors: GreatCall Jitterbug; Consumer Cellular (which offers a discount for AARP members); and SVC Senior Value Cell Phone by TracFone.

AGE focused only on those nationally available wireless providers offering inexpensive prepaid plans and "senior friendly" phones with larger buttons, large-number readouts and hearing-aid compatibility. AGE is 100 percent independent and makes no commercial endorsements of any kind. AGE's Senior Advocate Health & Safety Project has been created to provide older Americans with reliable information they can use to save money, be healthier and live safer lives.

Looking at the three wireless options, AGE found that SVC Senior Value Cell Phone (SVC) had no activation fee, the least-expensive option for service (allowing consumers to keep their phone active for about $7 a month, requiring only $20 in use or payment every three months), and the lowest-priced "senior friendly" handset, the Samsung T155G, for $14.95. By contrast, both Jitterbug and Consumer Cellular require a $35 "start up" or "activation" fee for new service, impose higher entry points for consumers ($14.99 a month for 50 minutes on Jitterbug and $10 a month to maintain service on Consumer Cellular), and more expensive "senior friendly" handsets ($49-$79 for Jitterbug, even though its features are very similar to the SVC handset, and $25-$30 for Consumer Cellular's Doro handsets).

On the other hand, the differences between the three services are less evident for higher-volume callers, with Jitterbug at $19.99 for 100 minutes, Consumer Cellular with $20 for 250 minutes and $19.99 for 125 minutes at SVC. Even at these levels, the additional activation fee and higher handset costs would offset much of the differences between these plans, AGE noted.

All three services provide nationwide coverage with no roaming costs, with SVC also providing international calls to 100 destinations for the same price as local calls (the same as its sister TracFone brand).

David Herman, vice president and national spokesperson, Alliance for Generational Equity, said: "Expensive cell phone plans no longer need be an impediment to American seniors getting wireless. Older Americans who still don't have cell phones should think seriously about taking advantage of the aggressive price war now going on among wireless companies to get more seniors to take the plunge. And for seniors who are paying too much on pricey contract-based cell phone service and throwing away hundreds of minutes a year, it's a good time to think about switching to a cheaper prepaid plan."

Mac Haddow, senior fellow on public policy, AGE Senior Advocate Health & Safety Project, said: "The current price war among cell phone plans catering to older Americans is good news for seniors and for those who may want to buy an affordable cell phone for a parent or grandparent. What we are seeing here is basically the extension of prepaid cell phone prices savings to one of the huge markets out there - the 13-19 million older Americans who either don't currently own a cell phone or no longer have one. The key here is to be a savvy shopper and get the cheapest possible deal that meets your needs."

FIVE TIPS FOR SENIORS BUYING CELL PHONES

1. Go prepaid.

Chances are that you don't need what you are paying for with an expensive contract-based cell phone. In addition to wasting minutes every month, you also face the threat of a major cancellation penalty if you want to switch phones. Dump the contract and save money by going prepaid.

2. Never buy more phone than you need.

If you don't need an iPhone, Blackberry or Android smartphone, you should avoid the mistake of thinking all "senior friendly" phones are alike. Look for big buttons, a clear digital readout with over-sized numbers, simple features, and hearing aid compatibility. The chances are good that these features will service you much better than a lot of bells and whistles you will never use.

3. Shop around for the best prices on your phone.

AGE's analysis found that one of the three companies we examined is charging up to $79 for a phone with basically the same features that another of the three companies makes available for only $14.95! Just because you see a phone advertised heavily in magazines or late night television advertisements does not mean that's the best price you can find.

4. Beware of hidden fees and short-term incentives.

Just because you have gotten rid of the "early termination fee" on your contract-based cell phone does not mean that you are free of all fees. Two of the three companies we examined charge a $35 "activation fee," even though another of the three does not. One of the three companies AGE reviewed offers AARP members three months of more minutes at a cheaper price, but that does not really go to the issue of the long-term cost of owning the phone.

5. Figure out your phone use profile and then shop accordingly.

If you make a lot of calls on your cell phones, the differences between the three wireless companies we examined are less clear. If you are a new wireless user or just want a wireless phone for occasional or emergency-only use, then the good news is that you can keep your phone active for as little as $7 a month. Compare that to a contract-based cell phone that may charge you $60-$80 a month - whether or not you use the phone for 5 minutes or 500 minutes!

AGE emphasized that seniors should do their own homework and buy the cell phone that is right for them. For more information about the companies reviewed here, go to: Senior Value Cellphone (www.seniorvaluecellphone.com); GreatCall/Jitterbug (www.greatcall.com/); and Consumer Cellular (www.consumercellular.com/).

ABOUT AGE - The Alliance for Generational Equity (www.ageadvocacy.org) is committed to protecting each generation from abusive public policies and other practices that erode their quality of life and rob them of their hard-earned wages. AGE is dedicated to formulating and advocating public policies and other practices that protect the economic security and quality of life of each generation. AGE seeks to find solutions outside of political parties and ideological partisanship. The Senior Advocate Health & Safety Project is an undertaking of AGE to provide older Americans with reliable information they can use to save money, be healthier and live safer lives.