Clark Howard

Report: Americans Are Overspending on Cell Phone Service by $1,500/Year

WhistleOut and Mint Mobile have released their annual Cell Phone Plan Overspending Report. The survey revealed that Americans currently spend $157/month on a cell phone plan from a major carrier while the average MVNO plan costs around $30/month. Based on these numbers, Americans could save over $1,500 on cell phone service by switching away from one of The Big Three.

In this article, I’ll share the highlights of WhistleOut and Mint Mobile’s findings as well as our top picks for affordable cell phone service providers.

How MVNOs Can Reduce Overspending on Cell Phone Service

A new survey from WhistleOut and Mint Mobile revealed that most Americans are overspending on their cell phone bills. The main reason reported was brand loyalty: Customers are reluctant to leave AT&T, Verizon or T-Mobile. However, smaller cell phone service providers that operate on the same towers as The Big Three (MVNOs) are increasing in popularity for a good reason: They offer the same service at a much more affordable price.

MVNOs (mobile virtual network operators) include companies like Mint Mobile, Visible, US Mobile and Google Fi. These companies run on the same networks as The Big Three. For example, Mint Mobile runs on T-Mobile's network while Visible is owned by Verizon Wireless. The study found that the cost of a cell phone plan from an MVNO is $30 on average, which is a huge savings compared to what respondents reported spending on their monthly cell phone bill: $157. Plus, MVNOs provide access to the same major networks.

Here are a few highlights from the survey:

  • 47% of cell phone users now subscribe to an MVNO plan instead of a major carrier
  • Over half of Gen Z has a phone plan from an MVNO in 2024
  • 39% of people who are with one of The Big Three cell phone service providers think they're overspending on their phone bill
  • Over 1 in 4 Americans can't comfortably afford their current monthly cell phone bill
  • Switching to an MVNO could save the average cell phone user more than $1,500 a year

Not only are the cell phone plan's baseline prices higher from The Big Three, but all three (AT&T, T-Mobile and Verizon) have either increased their plan prices or reworked their plan offerings since the beginning of 2023. For these reasons, the survey challenges customers to ask "What have these carriers done lately to earn your loyalty?"

The Problem With Unlimited Data

In addition to brand loyalty, paying for unlimited data is another reason that we tend to overspend on cell phone service. Many people believe they need an unlimited phone plan, but the average American likely uses much less data than they realize.

Unlimited data plans are significantly more expensive, especially when shopping for a postpaid unlimited plan from AT&T, T-Mobile or Verizon. “Unlimited” plans from MVNOs tend to come with a set amount of high-speed data per month before reduced speeds. Fortunately, not many people need truly unlimited data.

Here are a few statistics shared in the survey:

  • 76% of customers have an unlimited phone plan
  • 63% of people with an unlimited data plan use less than 15GB of data per month
  • 68% of Baby Boomers who said they use over 20GB of data a month found that they are actually using much less
  • 55% of people with unlimited data plans use Wi-Fi most of the time

According to the survey, consistent access to Wi-Fi is the main reason most people don’t come close to using their mobile data allotments. Most of the time you spend online is likely when you’re at home or work where you have consistent access to Wi-Fi. The only cellular data you should pay for is what you’ll need outside of these locations.

The best way to find out how much data you truly need is by tracking your monthly data usage. Most smartphones will show you how much data you've used in the current billing period in your phone's settings menu. You can navigate to "cellular data" or "network & internet" to see how many MB or GB you've used.

Additionally, you can check your most recent phone bills to see how much data you've used. If you aren't able to figure out your data usage on your own, you can always contact your current carrier to ask how much data you've used in the last few billing cycles.

If you find that you're consistently using less than 40GB of data (or less than 20GB, 15GB, 5GB, etc.) you can find a phone plan that offers an appropriate amount of high-speed data and save a ton compared to unlimited plans. Many MVNOs offer cell phone plans with these preset amounts of high-speed data per month for as low as $15/month.

The Best Affordable MVNOs: Our Top Picks

If you are ready to start saving on your monthly phone bill, consider switching away from one of The Big Three and getting your phone service from an MVNO.

WhistleOut and Mint Mobile's report highlighted the following benefits you'll find with most MVNOs:

  • Cheaper plan prices
  • The same service as major carriers
  • Freedom to easily switch plans or carriers
  • No contracts
  • No credit checks for service

Here are a few of our favorite MVNOs and plans:

Some of our other favorite MVNOs include Tello Mobile (Review), Google Fi Wireless (Review) and Consumer Cellular (Review).

You can check out our full list of the best cheap cell phone plans and deals here. If you do decide to make the switch to a more affordable phone service provider, check out our step-by-step guide on how to avoid common mistakes when switching.

According to the report, WhistleOut and Mint Mobile surveyed over 1,000 U.S. adults using Pollfish. Results are post-stratified. MVNO average cost was calculated using internal data.

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