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How to dial up the best cell phone deal

Cell phone providers tend to be offering fewer plans these days. Jean Chatzky has advice on zeroing in on the best service.

Last week I called Verizon to upgrade my cell phone. I've been using the same basic Motorola — no camera, no color screen, no Bluetooth (heck, it doesn't even flip open) — for the past two years. My contract is up and I figured renewing for a year or two was the best way to snag a groovy, higher-tech model at a dirt-cheap price.

What I didn't count on, though, was a bump up in the cost of my service. I'm on a plan right now that gives me 2,000 minutes a month for $99.99 with free nights, free weekends, and no long-distance or roaming charges. This is a great plan for me because I use a solid 1,800 to 1,900 minutes a month, pretty much without fail. I never go over. And I never feel I'm overbuying.

But my 2,000-minute plan doesn't exist anymore. The customer service rep offered me the option of 1,500 minutes a month for the same $99.99 or 2,500 minutes for $149.99. Which one did I want? she asked. "Actually," I replied, "neither one."

I hung up and called Allan Keiter, founder of MyRatePlan.com and my favorite wireless guru. I explained to him what happened — and the fact that the extra $50 a month I'd spend on service would soon wipe out any money I saved on a new phone. He was not surprised at all.

"Across the board, the carriers have reduced the number of options — the number of plans that they offer," Keiter explained. "Where they used to have nine national plans, they now have six. A lot of regional plans have been eliminated completely." What this means for anyone shopping for new service either because they're just starting up or because they're at the end of a contract period is that you can no longer assume your existing carrier will be able to meet your needs. Here's a game plan for finding a plan that fits at the best price:

1) Know your usage patterns. Before shopping, you need to know how many minutes per month you talk, how many of those are at night or on the weekend (where you can generally find service for free) and whether or not you need to be able to roam (or call from outside your coverage area). The customer service reps from your current carrier can give you this information at the drop of a hat. If you plan on using text or picture messaging, make note of that as well. As with minutes, you're much better off buying a bundle of them up front than texting first and paying later.

2) Use a search engine to match your needs with plans in your area. Personally, I'm partial to the one at www.myrateplan.com, but there are lots of others as well. The thing to remember is that number portability means you can switch carriers at the drop of a hat (as long as your contract is up). Query your talkative friends to find out which providers have the best service in your area. And remember: All carriers give you a two-week trial period. So if you buy service from a new carrier and are frustrated to find in the first 14 days that you're dropping calls left and right, you can return the phone and cancel the plan, paying only for minutes used.

3) Shop around for the best phone prices. Generally, you're not going to get the best price, Keiter says, buying the phone (or service) directly from the carrier. Instead, use the Web to search for the phone you want at the best price. Then sign up through the retailer that offers it.

4) Don't lock in for two years if you don't have to. One-year deals are a little tougher to find, but most carriers still have them if you look around. That way, if you're a big fan of having the latest, greatest phone technology, you won't have to wait another 24 months to grab it.

5) Finally, think about recycling your old phone. A company called RMS that runs a Web site called cellforcash.com is currently paying for more than 430 different models of phones. My old Motorola is only worth $5. But others are worth 10, even 20 times that. And even if you're holding onto phones that are totally worthless, you can print out a prepaid label and send them in to RMS to be recycled responsibly. The University of Florida recently did a study that proved that hazardous materials in phones can leach into the soil in landfills. With 130 million phones retired each year, that's an awful lot of potentially toxic waste.

Jean Chatzky is the financial editor for “Today,” editor-at-large at Money magazine and the author of “Talking Money: Everything You Need to Know About Your Finances and Your Future.” Her latest book, "Pay It Down: From Debt to Wealth on $10 a Day," is now in bookstores. Copyright ©2005. For more information, go to her Web site, .