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5 Overlooked Digital Charges to Eliminate and Save $500 Print E-mail
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House - Utilities
Written by Omie Ismail   
Wednesday, 07 April 2010 03:28
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5 Overlooked Digital Charges to Eliminate and Save $500
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The big things that cost you a bundle are easy to spot and get a handle on. But what about all those little pesky charges that you seldom notice - do they add up to more than a hill of beans? Take your Phonecommunication and entertainment charges - if you overlook these five little beans, it could end up costing you $500 or more each year. If you want to cut your cable bill or phone bill read on.

Cable Box and Modem Rental Fees:

Even if you’ve already negotiated the best possible cable deal with your provider, there’s one charge that you probably missed: the cable box fee or the cable modem fee. If your cable service is provided by Charter Communications or another big operator, they’ll charge you a whopping $5 to $6.95 a month for each of these boxes. $10 - $12 a month for both of these works out to over $120 a year. If you’re stuck to cable, you can purchase a digital cable box in good condition online for about $30 and the cable modem will cost you another $25. Some carriers won't let you buy the box, so check with them first.  Work to negotiate the monthly cost down if they won't or threaten to go to satellite.  It will take all of 6 months to recoup the cost. Ditch the rental and if you want to save more, dump your cable altogether.

Annual Fee Savings: $130


Federal Subscriber Line Charge

Many traditional phone companies responded to the VOIP threat from Skype and Vonage by offering a “free” bundled phone line. To get a slice of the VOIP business, cable operators got on the bandwagon and made similar offers for no cost telephone lines. I decided to take advantage of my cable operator’s generosity so that I could have a free dedicated fax line for 12 months. No biggie I thought, I can always cancel after a year or re-up the free deal. The problem was that I never paid attention to the fees, which definitely were not free.

The biggest catch was a peculiar charge - the “End User Common Line Primary”– at least that’s how my cable operator referred to this non-governmental fee. It’s also known as Federal Subscriber Line Charge. No matter what they call it, what’s it for? It turns out that the FCC allows them to charge up to $6.50 per primary line even though their cost is far lower. The rationale is that it’s a way to level the playing field with local phone companies. Your provider will be glad to take your $6.50 and the end result is that the ‘free line’ that you might use for all of 30 minutes a month ends up costing you about $78 a year.


You can always eliminate this charge by getting rid of the ‘free line’ that ain't so free; or you can try calling your telecom provider and tell them that you know that this charge bears no resemblance to their true cost and that you are going to drop them if they don’t remove it. It’s nothing more than a profit maximizer posturing as a government ordained fee. And it tells you everything you need to know about why telcos love giving away “free” lines.

Annual Fee Savings: $78

Voice over IP Taxes:

Unless you’ve already caught onto Skype, those $17.99 or $24.99 rates on Vonage look pretty good. But if you think that is going to remotely resemble your phone bill, think again. Every month, you will get hit with a bevy of fees. For instance, last month, I got hit with a $2.98 Regulatory and Compliance Fee, an Emergency 911 Service Fee of $1.49, a Federal Program Fee of $4.18 and a Local Utility Users Tax of $3.99. That’s about $13 in fees for something with a $17.99 base fee. And that’s not the worst of it - those fees are going up. On April 23rd, Vonage will increase both its 911 fee and Regulatory and Compliance Fee to $1.99 each. Given my usage, that’s going to add another $1.50 a month for lines that I hardly ever use. What ticks me off is that when I started with Vonage the only fee they charged was a flat $1.50 a month “Regulatory Recovery Fee”. So Vonage fees have gone up by about 700% over time, creeping up little by little each year.

Switching to Skype or an equivalent service could save about $14 a month in fees alone.

Annual Fee Savings: $168

Cable Bill Taxes:

If you are one of the nation's 70 million cable subscribers, you are probably paying taxes that you could do without. Franchise fees, local utility taxes, and the like can cost you between $5 and $15 a month depending on your service. Although a few states like North Carolina and Ohio have started taxing satellite services, most states remain tax free with the exception of equipment rentals. Right now Dish Network and DirectTV are having a price war that makes their rates more affordable than cable. When you add in the extra taxes you’ll be dodging, there’s a huge difference in price. Dump the cable altogether or get satellite and save an average of $8 a month in taxes alone.

Annual Tax Savings: $96

Mobile Text and International Fees:

I have to admit, it took me a while to find the fees on my Verizon wireless account. By default, my account shows a summary of the fees only. Digging down however, I found one fee that I should never have been paying. For whatever reason, Verizon has been charging me a $3.99 fee for an international calling plan on each of our family lines. I found that interesting because we never make international calls from our mobile phones - that’s why we still have Vonage. So I was paying $8 a month for something of absolutely no value. Now that's us, but maybe you aren’t affected by the international charge but take a minute to check it out. It adds up to $48 per year per line.

The charge that really gets me is for a service that can be had for free. If you have a smart phone with Internet access, there really is no reason to pay for texting. You can text or instant message for free with numerous applications including mobile Skype. You may get hit with the $0.20 fee for the inbound text that you receive, but if you respond to that person with your free text account and let them know to reply to you there, you'll should save another $60 a year.

Annual Fee Savings: $50+ Each

Eliminating any one of these expenses doesn't seem like that much money.  But if you're as wired as I am, the savings can easily add up to over $500 a year. I am sure that's money that you can put to better use in your retirement account. Of course, you might have other charges that differ from mine, but a careful review of your telecom bills will usually turn up a few expenses that can be eliminated with a single phone call.

Looking for more great reading, read our newest article 8 Landmines that Will Blow Up The Best Laid Financial Plans.

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