Video:How to Pick a Cell Phone Plan

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Transcript:How to Pick a Cell Phone Plan

Mobile to mobile, calling circles, texting, data plans, rollover minutes and contracts -- signing up for cell phone service these days can seem a little confusing. But it doesn't have to be. Picking the right service plan is all about figuring out exactly what you need out of your cell phone.

There's a real tendency to over-buy when signing up for a new plan. Unlimited minutes, texting, photo-sharing, and internet access are tempting offers for their simplicity, but many times you'll end up paying more than you need.

Start by looking at your old cell phone bills, and look for patterns in your usage. Do you make a lot of calls during the day? Are most of your calls to the same few people? How much time do you really spend on the internet, and how much do you really need it when you're on the go?

If you're signing up for a cell plan for the first time, you're going to have to make a few guesses. Just make sure that your carrier will allow you to change your plan, without renewing your contract, if your guesses don't match up with your actual use after your first bill.

You should also do a little research on the major carriers, to see what kinds of packages they offer. Most plans will give you free service after 7pm on weekdays and on weekends, some offer plans that allow you to call a handful of people for free anytime, and some give you the ability to call anyone, from any cell carrier, anytime, for one flat rate. Be sure to see if unused minutes from one month carry over to the next, and always be sure to see how much you'll be charged for minutes over your package allotment.

You should also check to see if the fancy new phone you want requires a data plan -- while surfing the net on the go can be a useful tool, it is an added expense. Now, before your head starts to spin from all these options, here's another little tip that could save you a load of headaches: ask your friends.

Although most carriers will show you an optimistic coverage map of your service area, the easiest way to find out which company works best where you live is to ask around. Some services work great in metropolitan areas and even underground, but can't be counted on outside city limits.

You should also consider how important being under contract is to you. Most major carriers require a 2-year commitment for new customers, but pre-paid plans allow you the option of spending as you go.

Contracts often come with deep discounts on new phones or other enticements, but carry stiff penalties if you cancel service or switch carriers early. Pre-paid plans will keep you from spending more than your budget and can be gotten without a credit check, but often times end up costing more for heavier use.

Don't be afraid to pit competing carriers against each other, but also don't be surprised if they don't budge much. Keep an eye out for internet specials, and once you decide, always be sure you know exactly what you're getting in your plan, and exactly how much it costs.

I'm Jonathon Stewart, with About.com.