Clark Howard for Mobile

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Smartphone and Data Plan Guide for 2014


The cost of monthly cell phone service is dropping. The change for your wallet is the best since the last big wave of discounting began 15 years ago. Plans and services are morphing in many different directions at once. That makes saving money more complicated and requires you to decide what compromises you are willing to live with to save money.

 

Find the best deal on no-contract mobile and cell service

Cell phone service can now be divided into 3 types: The Big Four, discounters, and innovators.

The "Big Four" Mobile providers

  • T-Mobile changed the market for the Big Four with its Uncarrier strategy. Now they've expanded their family plan to support up to 10 people.

    You sign up no contract and pay a real price for a phone.  When it comes to service, the first person pays $50 per month, the second person on your plan pays $30, and 3, 4, and 5 people on your plan pay $10 per month; and the remaining lines cost $20 each.

    Here's a bonus: T-Mobile will pay termination fees for you if you leave any contract carrier and come to them.

    Meanwhile, T-Mobile has cut prices on its sub-brand called GoSmartMobile.com. For $25 a month, GoSmartMobile customers get unlimited talk and text and unlimited Facebook at 4G speeds. At $35 a month, you get unlimited talk, text, Facebook, and 500 MBs of data a month. And for $40 a month, you get all that and 3 GBs of data in total, which would meet the needs of the vast majority of smartphone users.

  • AT&T has suffered the most lost customers to T-Mobile, as both companies use the same technology called GSM, and T-Mobile is paying termination fees for you if you leave any contract carrier and come to them.

    Feeling the heat from T-Mobile, AT&T has now instituted a big price cut as well for families. The first two lines cost $130 per month. Not great. However, each additional line is $15 per month. For 5 lines you pay $175 per month or $35 per line. That includes unlimited talk and text for all lines and 10 gigs of data to share among the lines.

    Meanwhile, AT&T also has a new discount brand of cell service now that they've bought Cricket. The pricing starts at $35 a month and goes up to $55 a month depending on how much data you use.

 

  • Sprint has a new offer at a jaw-dropping low price: You can have up to 10 people on your plan for a flat $100. That includes unlimited talk, text, and 20GB of data to share among the 10 lines. (There's also an additional 2GB included per line to avoid any overages!)

    Stay tuned for new much lower-priced individual plans coming from Sprint later this week!

 

  • After staying on the sidelines and being reluctant to discount, Verizon has just announced a rate cut for Edge customers. What they used to charge $110 for has now been discounted to $60 a month. That includes unlimited talk, text, and 2GB of data. But as with most discounts, you have to ask for it; if you don't ask, you don't get!

If you're intent on staying with any of the Big 4, take a look at WhistleOut.com. The site makes it easy for you to find the best plan to meet your needs with a free comparison shopping tool.

The Discounters

The discounters have grown their customer bases by big amounts in the last few  years. However, I don't expect much growth unless they cut rates again.  


  • Straight Talk charges around $45 per month for unlimited talk and text with 3 to 5 gigs of data a month. All are non-contract and all buy blocks of time on the networks of the Big Four. Straight Talk is the largest and has service on all 4.

  • Boost Mobile, meanwhile, is offering a new special 4G service for $35 per month (for 6 months) with unlimited talk and text and 3.6 gigs of LTE data. This introductory monthly rate increases to $50 a month after 6  months. At that time, you are eligible to earn remaining Shrinking Payment milestones (potentially reducing payment to $40/month after max milestones earned).

With any of the discounters, the phone you buy or bring determines whose network you will be on.

The Innovators

These providers have the most opportunity to save money -- and the most odd terms of use. All three use wi-fi as a way to pass savings on to you.

  • Republic Wireless is my favorite. For $25 per month you get unlimited talk, text, and data. That is the best deal in America. You buy a very good Android called the Moto X for $299 or a decent phone called the Moto G for $149. Then you use the phone like any other, except most of the time you are on wi-fi instead of cellular. Thus the savings. (My review of Republic Wireless.)

  • Scratch Wireless offers a free plan that is hard to wrap your mind around. You buy a Motorola Photon Q for $269. It is a dated midrange Android. You have unlimited everything anywhere there is wi-fi, and get unlimited free texting everywhere including on cellular. If you want talk and data on the go, you can pay a daily or monthly fee. Scratch is counting on the fact that most of the time we are somewhere where there is free wi-fi.

  • Freedom Pop offers a freemium service. You buy any of a variety of Androids with prices all over the place (starting at around $99) and get 200 minutes, 500 texts, and 1/2 Gigabyte of data per month for free. There are a variety of paid options including unlimited talk and text for $10.99 per month, and $20 a month for unlimited talk and text with 1 GB of high-speed data. And finally, you can now use the iPhone on Freedom Pop. See their website for details.

    That's the good news about Freedom Pop. The bad news is the call quality on FreedomPop is severly lacking. While the coverage seems fine, the call quality is just mediocre at best. It's a definite work in progress. But the data works very well, just as promised.

There will be many more new innovators in 2014. Look around and take your time before you choose. And NEVER sign a 2-year contract again!

For further reading:

Cheap Airfares to Hawaii and Elsewhere!

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If you daydream about going to Hawaii, I've got breaking news for you that will make it cheaper getting there.

Check out these cheap tickets to Hawaii

Allegiant Air has a sale from West Coast destinations flying to Hawaii that starts as low as Los Angeles to Honolulu at $288 round-trip (RT).

That's forced others who fly to the islands to offer their own discounts, though not quite as cheap. Hawaiian Air is offering deals to Maui for $444 RT from the West Coast.

Meanwhile, out of Seattle, I'm seeing fares to Asia starting around $650 RT and many more priced in the $700s RT. The next 2 weeks are going to be key to saving money through the fall on leisure travel.

Coast to coast deals abound too around this time of  year. Virgin America -- which by some measures is the best in the skies -- has a sale offering good fares on that front.

Some other crazy offers I've seen is include Frontier Air doing $19 to Washington D.C. from Detroit, Florida, Charlotte, and other locations -- if you can find seats. You can't even get to the airport for that price in some places! Frontier is an aggressive discounter with a typical fare around $59.

Note that all of the carriers I've mentioned so far are discounters, not full-fare airlines.

This has been a year of extremely high airfares at American, United, and Delta as they've consolidated their chokehold on domestic and international travel. The 3 full-fare airlines are only interested in high-value customers; they don't care about leisure travelers.

Announcing new national travel deals and social media pages

Clearly, the calendar has just hit the point where real deals on travel are popping up for the slower fall travel season. That's led to something new on ClarkHoward.com.

You already love our Atlanta Travel Deals page. Now those outside of Atlanta can get a bargain too. Our new National Travel Deals page reveals the day's hottest daily national and international travel bargains.

Want to get these deals in your social media newsfeed? Follow our new Clark Smart Travel Deals pages on Facebook and Twitter.

You wanted it, you got it!

Beware of the Latest Threats to Facebook Users

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A fake app making the rounds on Facebook promises to let you change the color of your profile, but it might just make you see red.

The so-called Facebook Color Scam was first reported by Cheetah Mobile. If you click on the app, it takes you to a site where you're asked to watch a tutorial video that promises to explain how to change the color on your profile.

Watching the video will reportedly give hackers immediate access to your profile. But if you decline to watch the video, you'll be directed to a pornography video player on a desktop or laptop, or to an antivirus app on mobile. Both, as you might imagine, contain malware.

If you have accidentally watched the video, you need to immediately change your password and remove the app, which can be done from the Facebook app settings page.

ARTICLE: Facebook Messenger App Permissions: Friend or Foe?

Watch out for the Robin Williams last video scam

As you go around on social media, you may see a video popping up claiming to be the last video made by Robin Williams before his tragic suicide. Sadly, crooks have found a way to exploit the terrible loss.

The video -- which is titled 'Robin Williams Says Goodbye With His Phone Video Before Suicide' -- prompts you to share the video and complete an online survey before you can watch the clip. However, there is no video to watch, according to WeLiveSecurity.com.

The trick here is crooks get you to complete the survey, thereby scoring them some affiliate cash, and hopefully you'll share it with friends who will do the same.

A separate report I saw suggested there's a variant where you're prompted to download the latest version of a video player, but you're really downloading malware. It's being called "clickjacking."

I don't tell you this to make you paranoid about surfing around. But you do have to be careful!

Unpaid toll phishing scam

Finally, there's a third scam I need to tell you about. Have you ever seen a notice saying you're in trouble with a toll authority for not paying?

Several toll authorities are reporting there's an email making the rounds with the subject line, "In arrears for driving on toll road." If you click on the link in the email, you're taken to an invoice for a supposed toll you did not pay.

You know how this one plays out: It's a virus and the crooks are trying to get your financial info and mess with you.

I know it's hard to know who to trust online. Be careful out there!

ARTICLE: How You're Being Tracked at Work

New Ways To Pay Down Student Loans

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Student loan debt is now nearly $1 trillion collectively for borrowers in the United States. Yet there could be help on the horizon if you have federal student loan debt.

Here's a new way to pay off your student loans...

Under the new Pay As You Earn repayment program, your monthly payments on federal loans will be capped at a 10% of your income. In addition, your outstanding debt is forgiven after 20 years of on-time payments. This new provision applies to federal student loans taken out after October 2007; it does not apply to any private loans.

UPDATE: Under an expansion of the program, those who borrowed before October 2007 will have their federal loans eligible for the same treatment beginning in 2015.

(Note that under the current rules, for federal student loans taken out before October 2007, your payments are capped at 15% of your income and must be paid on time for 25 years to be forgiven. This is part of the income-based repayment program. Visit IBRInfo.org for more info.)

See if you're eligible and learn more about Pay As You Earn here.


Meanwhile, MBAs are a hot degree area in the business world. Yet new figures from The Wall Street Journal  show that the average MBA degree debt has climbed to $81,758. At the same time, average pay for an MBA holder with three years of experience is $53,900.

Don't get me wrong; an MBA can be a good step on the career ladder in business. But numbers-oriented MBAs ("hard MBAs") are generally more valuable than management-oriented MBAs ("soft MBAs").

Clark's rules of student loan borrowing

  • Never borrow more for a 4-year degree than the entry level salary you expect to earn your first year after receiving that degree.
  • Consider doing the first 2 years of your studies at a community college, and then transferring those credits to the school from which you want your degree.
  • Never borrow any private student loan money! If a degree exceeds what you can borrow under the federal student loan program, you should either pick a cheaper school or work your way through school.

 

The worst loan available is…

I want you to avoid private student loans at all costs. Back in 2005, the private student loan industry bought off enough politicians to gain the right to do any and all tactics short of causing you bodily harm in their efforts to collect on their money. You have no wiggle room when it comes to repayment options, like you do with federal loans as I explain below. Private student loans typically can't even be dismissed in bankruptcy.

A new way to refinance private student loans?

Recently, the private student loan market began opening up with the first real chance of offering refinances that I've seen in about 10 years.

The Cleveland Plain Dealer  reports a company called Charter One is advertising an Education Refinance Loan with fixed rates as low as 5.24% and a variable rate of 2.84% above the one-month LIBOR rate.

Those low rates are contigent on two things: A good credit score and a co-signer. So this offer is of no help if you're falling behind on debts and your credit is shot.

You can refinance anywhere from $10,000 to $170,000 in private student loans with 15 or 20-year repayment options. Federal student loans are *not* eligible for this refi offer.

Private student loans should still be avoided at all costs. But this option may help you if you're already stuck in one.
 

Student Loan Guide

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Do you need to borrow to fund college education for yourself or your child? I wrote this guide to tell you about my Clark Smart approach to student loans. Meanwhile, don't forget to have a look at my very popular section on student loan forgivness and income-based repayment plans for federal student loans! And there are even the first glimmerings of refinance options for those stuck in private student loans.

Types of student loans available

Subsidized Stafford loans
are the single best source of money you can borrow. The interest is picked up by taxpayers while you're in school. Subsidized Stafford loans first disbursed between July 1, 2013 and June 30, 2014  carry a fixed interest rate of 3.86%. Freshman can borrow $3,500 annually; sophomores can borrow $4,500 each year; and juniors and seniors cap out at $5,500.

Once you exhaust your subsidized Stafford stockpile, you want to move on to unsubsidized Stafford loans. Unsubsidized Stafford loans first disbursed between July 1, 2013 and June 30, 2014  carry a fixed interest rate of 3.86%, just like their subsidized counterparts. Similarly, freshman can borrow $3,500 in unsubsidized Stafford loans annually; sophomores can borrow $4,500 each year; and juniors and seniors cap out at $5,500. But I want you to borrow as little as possible in unsubsidized loans because the interest on these loans accumulates while you're in school.

As a third option, parents can help their kids by taking out PLUS loans, which are issued at a fixed rate of 6.41%.

You apply for federal student loans by visiting FAFSA.ed.gov and completing the Free Application for Federal Student Aid.

The worst loan available is…

I want you to avoid private student loans at all costs. Back in 2005, the private student loan industry bought off enough politicians to gain the right to do any and all tactics short of causing you bodily harm in their efforts to collect on their money. You have no wiggle room when it comes to repayment options, like you do with federal loans as I explain below. Private student loans typically can't even be dismissed in bankruptcy.

Clark's rules of student loan borrowing

  • Never borrow more for a 4-year degree than the entry level salary you expect to earn your first year after receiving that degree.
  • Consider doing the first 2 years of your studies at a community college, and then transferring those credits to the school from which you want your degree.
  • Never borrow any private student loan money! If a degree exceeds what you can borrow under the federal student loan program, you should either pick a cheaper school or work your way through school.


 

Ways to pay off your student loans

Are you struggling with federal student loan debt now that you're out of school? Fortunately, there is a lot of help for you if you limited your borrowing to federal student loan programs. Unfortunately, there are no similar programs to help with repayment of private student loans, which is partly why I advise against them!

Under the Pay As You Earn repayment (PAYE) program, your monthly payments on federal loans will be capped at a 10% of your income. In addition, your outstanding debt is forgiven after 20 years of on-time payments. This new provision applies to federal student loans taken out after October 2007; it does not apply to any private loans. To see if you're eligible for Pay As You Earn, visit the Education Department's website at StudentLoans.gov.

UPDATE: Under an expansion of the PAYE program, those who borrowed before October 2007 will have their federal loans eligible for the same treatment beginning in 2015.

(Note that under the current rules, for federal student loans taken out before October 2007, your payments are capped at 15% of your income and must be paid on time for 25 years to be forgiven. This is part of the income-based repayment program. Visit IBRInfo.org for more info.)

 

Get your federal student loans forgiven!

There are new student loan forgiveness laws that actually benefit a wide range of workers. Public service employees can qualify for full loan forgiveness after making 10 years of monthly payments on their federal student loans. By contrast, private sector employees must make 20-25 years of monthly payments on their federal student loans to have their remaining balance wiped away.

Below is a list of the public service fields that will qualify for loan forgiveness. Ask your loan servicer for complete details about how to take advantage of this generous program:

  • Government, military service, emergency management, public safety, law enforcement, public health, public education. (In addition, military personnel on active duty will be able to defer payments on their loans, and service members who are returning to civilian life will be able to defer payments for more than a year.)
  • Social work in a public child- or family-service agency; public interest law services, including prosecution or public defense or legal advocacy in low-income communities for a nonprofit organization; public child care; public service for individuals with disabilities; public service for the elderly.
  • Public library sciences, school-based library sciences and other school-based services.
  • Certain employees at nonprofit groups, as defined by the tax code, and full-time faculty members at tribal colleges or universities.

In addition, this comprehensive list compiles some of the most popular loan forgiveness opportunities. A state-by-state list of loan forgiveness programs has also been compiled by the American Federation of Teachers.

 


A new way to refinance private student loans?

Recently, the private student loan market began opening up with the first real chance of offering refinances that I've seen in about 10 years.

The Cleveland Plain Dealer  reports a company called Charter One is advertising an Education Refinance Loan with fixed rates as low as 5.24% and a variable rate of 2.84% above the one-month LIBOR rate.

Those low rates are contigent on two things: A good credit score and a co-signer. So this offer is of no help if you're falling behind on debts and your credit is shot.

You can refinance anywhere from $10,000 to $170,000 in private student loans with 15 or 20-year repayment options. Federal student loans are *not* eligible for this refi offer.

Private student loans should still be avoided at all costs. But this option may help you if you're already stuck in one.

Car Complaints Top the Consumer Gripe List

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Consumer complaints involving automobiles nabbed the top spot on a tally of the Top 10 gripes of 2013, according to a survey by the Consumer Federation of
America
(CFA) and the North American Consumer Protection Investigators (NACPI).

Among the other grievances: home improvement/construction (No. 2); Credit/debt (No. 3); retail sales (No. 4); and services (No. 9).

The problem is that all too often, our car purchases are emotional, not rational. The more emotional we are in car buying, the more likely we are to be taken advantage of.

When you're looking at buying a car, be sure to do the following:

 

  • Whether you're buying new or used, arrange your financing in advance with a credit union, small local community bank, online bank, or even a traditional bank as a last resort.
  • Research models you're interested in by reading the annual auto issue of Consumer Reports. They give recommendations by price point each April.
  • Use sites like NADA.com, KBB.com, and TrueCar.com to get a sense of a good price.
  • If you're buying used, have the vehicle inspected by an independent mechanic as a condition of purchase. Both used car dealers and individual sellers sell "as is" and can legally tell you anything about the car.
  • If you're buying used, be sure to run the VIN through the National Motor Vehicle Title Information System (NMVTIS) to check if it's a flood car or has otherwise been totaled or salvaged. Unfortunately, sellers in most states are legally allowed to lie to you about the vehicle and anything involving it. You've got to protect yourself.
  • When it comes to repairs, follow my steps I've laid out here.



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