Consumer Choices Teacher Guide

Transcription

1 Consumer Choices Teacher Guide

2 Consumer Choices Table of Contents Teacher Guide Keeping in Touch: Cell Phones Junior Guide Keeping in Touch: Cell Phones Senior Guide Keeping in Touch: Cell Phones Teacher Guide Gift Cards Member Guide Gift Cards Teacher Guide Frozen Pizza Member Guide Frozen Pizza Teacher Guide Shopping for a T-Shirt Member Guide Shopping for a T-Shirt Teacher Guide

3 Keeping in Touch: Cell Phones (Junior Study Guide) Young people love to talk on the telephone. It s a great way to stay in touch with friends. Cellular telephones are an ideal way to stay in touch for you can carry them with you. Cell phones also serve other important roles. Business people use them when away from their office. Salesmen and service people, such as plumbers and electricians, use cell phones to keep in touch with their offices and customers. Some people trapped in the World Trade Center collapse were rescued because they had cell phones. Many travelers and especially women traveling alone carry cell phones for safety. Cell phones are getting smaller and are able to do more things. Cellular phone service is getting better and covering more locations, but some rural areas still do not have good reception. Cellular phones cannot be used without cellular service. Cell phones are much like small radio stations. They change your voice into radio waves which are broadcasted. Towers are needed to broadcast the radio waves and send the message from tower to tower until it reaches its destination. Without towers the message cannot be sent. There are two parts to owning and using a cell phone. There is a phone, and the cell phone service. In this project you will learn about cellular phone service. It s not easy to know which plan is best for your needs. There are several different phone companies. Each company has several different plans, so there are lots of plans, each a little different. The different parts of the plan are called options. For example, if you select a plan that is for 60 minutes of service, that is an option. A plan with 200 minutes of service is another option. If the minutes can be used anytime of the day or night that is anytime minutes and it is an option. Or you might choose nighttime and weekend minutes, a less expensive option. The options chosen in the plan influence how much a service plan will cost. Types of Plans Prepaid Plans (no contract) Prepaid plans are designed for people who: Do not use their phone often. Some people have cell phones only for safety. With the phone they can call for help if there is an emergency. With the phone turned on they can be reached when there is a need. The phones would not be used often. Need a cell phone for a short time only. Some people do not stay in an area for a year. A foreign student may be in school in the U.S. for only a few months. A person living in a rural area where service does not exist would not want to sign a year s contract if he/she worked in a city for 6 months. A student from an area that does not have the same cell phone companies that are in his college town should not sign a year s contract if he/she returns home for the summer, or are first time cell phone users. A prepaid plan gives the chance to experience using a cell phone without a long-term contract.

4 Have bad or no credit. Contracts are made only with people who have a history of paying their bills. Some people, especially young people, have no credit record. Others have a poor credit rating or have filed bankruptcy. Prepaid cell phone services eliminate any risk of unexpected phone bills. When you buy prepaid minutes find out how long you have to use them. No contract (prepaid) service requires the user to: Buy a cell phone. It may cost about $75 or more for a basic phone. Pay an activation fee, which is about $ This codes the phone so it can be used. Buy a block of time. The number of minutes bought will determine the cost. For about $25.00 you may get about 70 minutes. Contract Plans Most cell phones use contract service plans. The customer signs a legal contract for service for one or two years. It is wise to sign a contract for one year instead of for two. If you want a second year on the same terms almost all cell phone companies are happy for you to continue. A cell phone service contract is a legal document. You must do what you promised. If you do not you can be turned over to a collection agency. Your credit rating can be damaged. If you try to cancel a contract early it will be very expensive. Clearly understand what you are signing. Keep a copy of everything you sign. Cell phones differ in design and function. There are many options in a service contract. It is a good idea to buy your phone and contract locally so the salesperson can demonstrate the phone use and explain the details of the plan. Some contracts require you to buy your phone. Other contracts will give you a basic phone when you sign the contract. You may be able to buy accessories such as a car charger and a headphone. With a service contract you will receive a monthly bill. The bill will be more than the contract cost. It will include local, federal, and state taxes. Be sure to pay the bill before the due date or you will have to pay a late fee. Your service must be compatible with your phone. There are lots of different kinds of phone contracts. Some people want a cell phone for safety. In case of an emergency they can call for help. They don t make many calls. The least expensive cell phone for them would be one without a contract. They would buy a cell phone card and pay about cents per minute for any calls they make. Or, they might get the least expensive contract for a year for about $20-25 per year. Those contracts provide about 70 to 100 local minutes per month. The people who make a lot of local calls would need a different kind of phone contract. They would get a contract that has lots of minutes of local airtime. The per minute cost of a call would be less but the total cost of the contract would be much higher, possibly $35-45 per month. Before signing a contract the person should make sure the phone company gets good reception on calls. Some people make a lot of long distance calls. They need another kind of contract. Nationwide calling contracts are usually the most expensive. You buy a specific amount of airtime for calls that can be

5 made anyplace in the nation. No roaming or long distance fees are charged. Some contracts allow calls to be made from any location. Other contracts require calls be made from your home base. Each kind of contract usually offers different options, for example, the number of air minutes available before other charges are added. They are also offered as individual plans or family plans. A family plan allows a discount for two or more family members buying air minutes jointly. The bill goes to one person. Cell phones are very popular. Young people love them! New features are constantly being added to phones, for example picture phones, text messaging, and electronic games. Two new phones have recently hit the market. They target early elementary age students. The phones are small, colorful and allow the young person to call authorized people without the risks of overspending and unsupervised calls.

6 Visit 3 locations that handle service contracts for cell phones. Two of the locations should be cellular phone service providers, (i.e.: Cinglular, Sprint, Alltel, etc) and one an electronics or some other type store. Interview the salespeople. Ask for a copy of their promotional material. Complete the following chart. Name of Company Store 1 Store 2 Store 3 # night/weekend minutes # anytime minutes Roaming Charges Home Area Additional minutes cost Cost of Phone Activation Fee Contract Length Cost per Month

7 Things to consider before selecting a plan. Who will you call? Who will call you? How often will you use the phone? Remember, cell phones are different from home phones. All calls that you make will count against your minutes. Also all calls that you receive will count against your minutes. If you use more minutes than your contract, there will be an extra charge for them. How many anytime minutes are included in the plan? At what time of the evening can you receive or make nighttime calls? If it is 8 PM and you make a call at 7:30 PM you must pay extra for that call. Is the contract for one or two years? Remember it is very costly to cancel a contract. Two years is a long time. Comparison shop among different sellers and different plans offered by the same seller. How much time should you buy? If you buy unused time that is wasted money. If you are not careful and exceed your time you can run up a big bill. Cell phones are programmed for the location where you get them. If you move away from your present location your new location may be long distance on your cell phone. For example suppose you move from Gainesville to Pensacola, you will be away from your cell phone s home area. If the same service carrier is in both locations you may be able to transfer your contract. If the same carrier is not in the new location you have a problem. Carefully consider the cost of various plans, your needs and your budget. Prepared by: Mary N. Harrison Professor, Consumer Education

8 CELL PHONE GLOSSARY Access Fee - A monthly charge for the ability to connect to a wireless network. Fee is paid monthly whether the phone is actually used or not. Activation Fee - A fee charged by service providers to configure a phone to work on a carrier's network. Airtime - The amount of time customers spend talking over their wireless networks, for which they are billed. Antenna - A device for transmitting and receiving radio signals. Cellular - The type of wireless communication that is moist familiar to mobile phone users. Called cellular because the system uses many base stations to divide a service area into multiple cells. Calls are transferred from base station to base station as a user travels from cell to cell. Coverage Area - The area in which you can use your wireless service as determined by your service provider. It usually includes your service area around your home as well as some extended service areas where you can use service, but where you may be charged long distance and/or roaming charges. Same as Service Area. FCC - Federal Communications Commission- A US government agency responsible for regulating communications industries. Handset - Any handhold device used to transmit and receive calls from a wireless system. Hands-Free - A feature for mobile phones that allows drivers to use their car phone without lifting or holding their handset to their ears. An important safety feature. Hands-Free Speakerphone - A feature of some wireless phones that allows users to talk and listen to calls without holding the phone against their heads. Local Calling Area - The region across which the call is truly local, involving no toll charges. Mobile Identification Number - The 10-digit number assigned to your cellular phone. Monthly Access Charge - The monthly fee you pay to have service from a wireless carrier Service Charge - The amount you pay each month to receive wireless service. This amount is fixed and paid monthly regardless of how much or how little you use your wireless phone. Service Plan - Rate or calling plan provided by a wireless carrier. Calling rates, allotted minutes per month and monthly fees vary by the service plan. Service Provider - A company that supplies telecommunication services, e.g., Verizon, Cingular, Sprint, etc. Subscriber - A cellular phone user. Wireless - Using the radio-frequency spectrum for transmitting and receiving voice, data and video signals for communications.

9 CELL PHONE PLANS Senior Member Piece Millions of people all over the world use cellular phones. They are convenient gadgets-- with a cell phone, you can talk to almost anyone on planet Earth from almost anywhere. Cellular phones have become a part of life. Professionals use them for communicating for work, parents use them to keep in touch with their children, and young adults use them to talk to friends and family. More importantly, cell phones can be used in case of an emergency. For example, if your car breaks down, you need a ride home from school, or you have to call your parents to tell them you are going to be late, having a cell phone would very helpful. Convenience is another important feature of the cell phone. We often see people using their cell phones in the supermarket to check on the grocery list at home. Functions/Features: Cell phones give us many functions and new, improved functions are being added daily. Depending on your cellular phone model you can: communicate with others store contact information make task or to-do lists keep track of appointments and set reminders use the built-in calculator for simple math send or receive get information (news, entertainment, stock quotes) from the Internet play simple games use as an alarm clock use as a vocal memo recorder When selecting a cellular phone plan, you must decide on a cellular service provider and a service plan that will meet your needs. Cellular service plans provide you with available minutes for talking time and long distance communication. They may also offer features such as caller ID, call forwarding, voice mail and more. Some of the most popular cellular service providers are Cingular Wireless, Sprint PCS, Verizon Wireless, Voice Stream, Sun Com, Nextel and others in their respective regions. Service plans can range in price from $20 to $200 per month. Selecting a plan: How do you decide which cellular service plan is best for you? First: consider what your phone needs are. Estimate how often you will be using your cellular phone. Think about the area of the country where you will be using your cellular phone and how much long distance you will need. If you are a high school student and will graduate soon, consider where you might be planning to move or go to college. If you are going to be out of state, consider a cellular service plan that offers national service and long distance. You may also want a service plan that will offer free long distance and roaming even if you stay in the same state. Consider how much you really can afford to spend monthly

10 on a cellular phone. Every provider offers a variety of plans with many different options from which to choose. You will find a plan that will fit your needs and price range. Types of Plans include: Local. This is the most limited plan, typically encompassing a metropolitan area and the suburbs that surround it. Most local plans require at least a one-year commitment. Regional. These plans cover a multi state area, such as the Southeastern United States. If you are outside that area, you will pay roaming charges of up to 50 or 60 cents a minute in addition to airtime. The same goes for local plans as well. These typically require at least a one-year commitment. National. The National plans are the highest in price and are aimed at people who travel. A national plan usually requires a year long contract and lets you call form anyplace to anyplace else in the U.S. Monthly charges range from $20 to several hundred dollars for thousands of minutes. Overtime typically costs 20 to 60 cents a minute. Breaking the contract early can cost you from $150 to $200. Family. These monthly plans address a problem that has long plagued households with multiple cell phones some family members will exceed their monthly allotment of minutes, while others will underutilize theirs. The solution is to give the family a discount on two or more phones, each with its own number, and a bucket of shared minutes. There are plans with national, regional, or local scope from which to choose. The family gets a single monthly bill. You have to keep track of the minutes each family member uses there is no simple way to know when the family quota has been exceeded. Prepaid. The most basic service offered. The pay-as-you go plan is good for people with problematic credit, those who do not want a monthly commitment, young people whose parents pay their bill or have a limited income, anyone who just wants to try out cellular, or those who want a phone plan for emergencies only. The consumer purchases card minutes for a certain amount of time. More minutes can be purchased periodically. Using this plan can allow you to test a service before committing to a contract.

11 Things to consider when selecting a cellular phone service plan: Roaming and Long Distance: Roaming and long distance are two cellular terms that are often lumped together. Long distance is a feature that you should consider carefully when selecting a service plan. First thing determine the purpose that the cell phone is going to serve. Use this equation from Point.com to calculate how much airtime you will need: Estimate the number of outgoing calls you expect to make each week and multiply that number times 2.5 (2.5 is the national average minutes per call.). Next, multiply that number by 4.3 weeks per month. The result is the number of minutes that you plan to use for outgoing calls. Do the same process for the number of calls that you plan to receive then total the two final numbers. This allows you to approximate how many minutes you need to purchase. Some plans allow for minutes to be accumulated or "rolled over" if the maximum is not used each month. The calculation for number of minutes can be adapted to estimate how much will use long distance. Once you have the amount of time you expect to use long distance, you can select the right plan for your needs. If you plan to make local calls only, then you do not have to worry about paying more for long distance calling. Some plans have long distance included, but only if the call originates in the home calling area. Make sure that you read the fine lines in the contract when you are looking at a cellular service plan. If you plan to use the phone when you are traveling around the country, you might want to get a national plan that allows you to make free long distance phone calls from anywhere in the country. The reason that roaming and long distance are used together is that some service providers may advertise free long distance, but they may charge you roaming charges when you are not in your home calling area. Roaming means calling outside your home calling area. Roaming charges summarize airtime and long-distance charges for calls made while roaming in another carrier's territory. They trick you by giving you free long distance, and then catch you on the roaming charges. Once again, you must read the fine lines in a cellular service contract before you sign it. Most national plans do not charge for roaming, but some regional and local plans have roaming charges. It always pays to know and understand your contract with a provider. Service Area: When researching service plans, look at the size of the service area. The service area is the area that is covered by your plan without causing you to roam in another carrier's territory. You should look for the plan with the largest area that still meet your needs and budget. Be sure to ask if local calls are limited to a metropolitan area. Some plans charge you for calls made to and from suburban areas. Get a detailed map of the cellular providers coverage area in order to pinpoint your home calling region.

12 The Billing Process: "When you sign up for a cellular service, you enter something of a time warp. That's because no matter which provider's plan you choose, a 'minute' of cellular calling time can be as short as a few seconds, and your monthly allotment of free minutes can quickly disappear. The billing process used by service providers can be very confusing. There are many terms and numbers on your monthly bill. The balance forward is a summary of current charges, by type of charge and may include monthly service charges, air time charges, long distance charges, roaming charges, miscellaneous charges and credits, and taxes." (Point.com.) If you have questions about charges on your bill, always contact the service provider and ask for an explanation. One of the easiest ways to avoid all of the billing confusion is to use a prepaid cellular plan. You may have to pay more for the minutes, but there is no monthly bill. When selecting a service plan, check how the plan will bill the minutes used. There are plans that bill by rounding up to the next minute, some bill in fifteen-second increments and some bill by the second. There are some plans that do not charge for the first minute of incoming calls. This is a way to protect yourself from losing air time due to wrong numbers. There are many billing aspects to take into consideration when choosing a cellular service plan. Two terms to look for when choosing a service plan or on your bill are peak calling minutes and off peak calling minutes. A plan may boast of having huge amounts of minutes, but you have to check whether they are peak or off peak minutes. Some plans have anytime minutes, which allow you to make calls any time during the day. Peak minutes are normally between the hours of 7:00 AM to 9:59 PM on Monday through Friday. The times of peak hours vary from plan to plan. Off peak is normally from 10:00 PM to 6:59 AM Monday through Friday. Another part of the billing process is the service. Some service plans provide call waiting, voice mail, 3-way calling and caller ID for free and others do not. It is important to assess all your needs before you enter into a cellular service contract. If you do not, you may be stuck with a plan that does not meet your needs, and there are normally high fees associated with canceling a contract. Most Used Plan Features: Wireless companies use plan features as a means to entice customers to use their services. The most widely used features include call forwarding, call waiting, caller ID, basic 911 and voice mail. Call forwarding is a network feature that lets you forward incoming calls to another phone number. Call waiting is a feature that uses a tone to indicate that another call is coming in; the second call can be answered without disruption of the first. Caller ID is a call-screening device on some phones that allows the customer to see the name and number of the incoming call.

13 Basic 911 allows the customer to dial a toll-free number in case of emergency. Voice mail is the feature that connects incoming calls to an automatic system to answer phone calls and record messages. Many companies also include enhanced service features like text messaging, roadside assistance, three-way calling, directory assistance and paging services. Text messaging is a feature that allows for an type message to appear on the screen of your phone without distracting anyone else. Roadside assistance allows the customer to call, usually with a certain number, for help if they break down or need some other type of assistance. Three-way calling allows the customer to talk simultaneously with two people at the same time on the same line. Directory assistance allows the customer to request phone numbers with the assistance of an operator. Paging service is a feature that allows the customer to receive pages as well as incoming phone calls. Because these features are not used as frequently, a per-month or per-use fee may be charged for these services. Using some of these extra features can consume your minutes at double time. It may not be worth the extra cost to have some of these services. For example, when someone leaves you a voice mail. This counts against your monthly allotment of minutes, and it subtracts time again when you check the voice mail. You must consider your options carefully and decide where and how you want to spend your money in a service plan. Peak Periods: Many cell phone service providers fool people with peak periods. A peak period, as previously mentioned, usually runs from 7 AM to 9.59 PM. The rate is usually higher during peak periods. Many people talk only during the peak times and never use the offpeak minutes. Off-peak usually runs from 10 PM to 6:59 AM. Point.com says "the difference in air time charges between peak and off-peak minutes often is so steep that it's worth checking your carrier's exact hours. Many companies offer service plans with hundreds of off-peak hours free on the weekends and in the evenings. This attracts many customers. They are also useful for teens that might use a cell phone at night or on the weekends. Contracts: In the past, contracts were inevitable for all who sought cell phone service plans. This is not the case anymore. Most carriers now offer a no-contract necessary package. In such cases, the customer decides month to month whether to stay with a particular cell

14 phone service. Many customers enjoy that freedom of control. Carriers often offer special deals to customers who sign a contract. These range from credits on their bill or extra airtime minutes as a reward for signing a one to two year contract. They also reward those signing contracts with lower monthly rates, cheaper cell phone prices and lower activation fees. The drawback to signing is that pricing and plans change quickly. If a contract is signed and the customer decides to change carriers before the contract is completed, there are often large cancellation fees. Some cancellation fees can be as large as $ When deciding to sign a contract with a carrier, be sure to look at the cancellation fee that would be charged to avoid losing money. Look for the shortest contract available or stick to the month-to-month plan, but do not be surprised by higher monthly charges. Summary: A cellular phone can be a very valuable asset. There will always be a time when it is convenient to have a cell phone. Many people have different uses for their cellular phone, and the service plan industry has responded to our needs by offering a variety of plans to fit the needs of as many people as possible. There are many aspects to weigh when choosing the right plan for your needs. You will be satisfied if you take the time to evaluate your needs and find the plan that fits for you. Educate yourself, do the research and be confident in the choice that you make. The satisfaction that you get will outweigh any costs that you have in searching for the right plan. References: Howard, C. & Meltzer, M. (2000). Get Clark Smart. Atlanta, GA: Longstreet Press Consumer Reports, February, 2002 UGA Students: HACE Texas 4-H Websites: E Wisdom Pricing Central -

15 CELL PHONE GLOSSARY Access Fee - A monthly charge for the ability to connect to a wireless network. Fee is paid monthly whether the phone is actually used or not. Activation Fee - A fee charged by service providers to configure a phone to work on a carrier's network. Airtime - The amount of time customers spend talking over their wireless networks, for which they are billed. Antenna - A device for transmitting and receiving radio signals. Cellular - The type of wireless communication that is moist familiar to mobile phone users. Called cellular because the system uses many base stations to divide a service area into multiple cells. Calls are transferred from base station to base station as a user travels from cell to cell. Coverage Area - The area in which you can use your wireless service as determined by your service provider. It usually includes your service area around your home as well as some extended service areas where you can use service, but where you may be charged long distance and/or roaming charges. Same as Service Area. FCC - Federal Communications Commission- A US government agency responsible for regulating communications industries. Handset - Any handhold device used to transmit and receive calls from a wireless system. Hands-Free - A feature for mobile phones that allows drivers to use their car phone without lifting or holding their handset to their ears. An important safety feature. Hands-Free Speakerphone - A feature of some wireless phones that allows users to talk and listen to calls without holding the phone against their heads. Local Calling Area - The region across which the call is truly local, involving no toll charges. Mobile Identification Number - The 10-digit number assigned to your cellular phone. Monthly Access Charge - The monthly fee you pay to have service from a wireless carrier Service Charge - The amount you pay each month to receive wireless service. This amount is fixed and paid monthly regardless of how much or how little you use your wireless phone. Service Plan - Rate or calling plan provided by a wireless carrier. Calling rates, allotted minutes per month and monthly fees vary by the service plan. Service Provider - A company that supplies telecommunication services, e.g., Verizon, Cingular, Sprint, etc. Subscriber - A cellular phone user. Wireless - Using the radio-frequency spectrum for transmitting and receiving voice, data and video signals for communications.

16 Worksheet for Comparing Annual Costs for Cell Phone Service Choices Steps to Figure Cost When Service Will Be Used Total Cost Peak Time Off-Peak Time While Roaming Estimate Minutes Used a Month Subtract Number of Free Minutes Equals Minutes Billed after free minutes are used Multiply by Per Minute Charge Equals cost per type of use Add costs for three types of use to find total cost above basic charge Add Basic Monthly Service Charge Total Monthly Service Cost Multiply by 12 = Total Cost of Annual Service Add price of cell phone (handset) First-year cost of cellular Other costs to consider Battery Life/Cost per year $

17 SAMPLE PLAN We've searched the web for the best wireless offer we could find, and we're happy to say, "We've found it!" Get AT&T wireless service with Unlimited Night and Weekend minutes, a FREE Nokia phone and $50 in credit when you sign-up today! FREE Long Distance! -FREE Nokia Phone! Night and Weekend minutes -FREE Nationwide Long Distance -120 Anytime Minutes -$50 Nokia Cash Rebate! -Hurry... While They Last! Additional Savings! Nokia $0.00 Shipping and Handling - $0.00 Total - $0.00 $50 Nokia Cash Rebate - YOU GET $50.00 NO ACTIVATION FEE Plan Features 1. AT&T Network Advantage Plan 2. $29.99 a Month Anytime and 2000 Night and Weekend Minutes 4. FREE Nationwide Long Distance 5. No Roaming in Continental US 6. Personal Voic Phone Features 1. Caller ID & Call Waiting 2. 3-Way Calling Ringing Tones 4. Stores Last 40 Incoming and Outgoing Calls Entry Phone Book with Assignable Ring Tones All orders are subject to AT&T credit approval. AT&T Wireless service not available in all areas. Caller ID service may not be available in some areas. Roaming charges of $0.60 per minute apply only when outside your AT&T Wireless home calling area. Offer available only for new subscribers to AT&T Cellular Service. You must be 18 years of age or older to apply. Buyer's remorse period is 30 days from activation and customer is required to return the unit with all packaging at their cost. Some restrictions may apply. Sonix Systems, LLC., an authorized agent for AT&T Wireless.

18 Teaching Guide Keeping in Touch (Contracts for Cell Phones) Cell phones are exceedingly popular and many students consider them a necessity. Owning a cellular phone is of no value without the service agreement that goes with it. To transmit messages there must be a way to convert voice into electrical impulses. Your cell phone acts as a transmitter. It converts words into electrical impulses that are carried as radio waves to a receiver (telephone). The receiver converts the impulses back into sound. Service is sold in blocks of time or minutes and when those minutes can be used. Your selections are called options. You must pay for the phone service. You choose the service options that are important to you. The options you choose determine the cost of the service. To get service you make an agreement with a cellular phone service company and sign a contract. Many of the companies that sell service for cellular phones are not the same companies that provide services for your home telephones. With home telephones you pay a monthly fee and make all the local calls that you want. You also receive telephone calls without any additional cost. You pay extra only for long distance calls. Cellular phone services are handled differently. When considering a cellular phone it is very important to look at the cost of service. The costs can add up quickly. There are different company plans and there are different plans within each company. Selecting the best cell phone plan is not easy. There are prepaid plans and there are plans that require one or two year contracts. It is expensive to cancel or get out of a plan after a contract has been signed. It takes time and a lot of comparing to select the best contract. Some cellular plans require you to buy your telephone. The price of a phone may range from a few dollars to several hundred dollars depending on its capabilities and features. Other service contracts give you a phone when you sign a one or two year contract. There are also accessories that may be purchased in addition to the telephone. OBJECTIVES For Participating Youths To: Understand that contracts are legal documents that are enforceable. Realize that service must be purchased for cell phones and that there are choices to be made in selecting the service. Understand that the options selected for cell phone service determines the cost of the service.

19 Be able to determine which options are needed and are affordable when selecting cell phone service. Understand the terms used in cell phone service plans. CONCEPTS TO TEACH Contracts for cell phones should be clearly understood and compared before one is selected. Most towns and cities have one or more retailers that sell cell phones and services. Some department and electronic stores also sell equipment and services. And, telephone companies such as the Bell companies and some long distance carriers such as Sprint now offer cell phones and contracts. Although service contracts of different companies are similar, each has features or options that are different. Also companies run special offers quite often. With so many choices it is difficult to decide which service program is the wisest choice. Perhaps one of the first things a shopper should do is become familiar with terms used in describing services and contracts. There are basically two types of cellular phone plans; one is prepaid (non-contract) and the second is contract. There are variations among each type of plan. Prepaid Plans (non-contract) Most non-contract plans require the user to buy the phone and pay an activation fee. The activation enables the customer to use the radio frequencies assigned to the service provider. The phone customer pays a fee for a designated number of minutes to be used later (much like the telephone card you can buy for long distance calls). For example, you may pay $20 for 200 minutes. You may use the 200 minutes during the next month or you may use them over a period of time. When you have used up the minutes you have no phone service until you buy additional minutes. When buying this type service it is important to find out how long you have to use the prepaid service. Some must be used within 3 months, others have longer. The pre-minutes cost is higher than the per minute cost on an annual contract but you do not run up large phone bills unexpectedly. Also, you are not obligated to use the services for a year or two if you do not like the service, you move, or your situation changes. A prepaid plan is a good choice for people who want or need a cell phone but rarely use it. An example is the person who wants a cell phone for safety when traveling, or for emergency use only. Prepaid plans are also a good consideration for people who have never used a cell phone. It gives them time to see if they need a cell phone, if the service is acceptable, an indication of how much they will use the phone and the costs associated with cell phone use.

20 Contract Plans Most cell phone users sign a contract for one or two years of service. Contracts are legal documents that are enforceable by law. It s important to clearly understand all terms of a contract before signing. There is usually a heavy penalty ($150 - $300) for canceling a cell phone contract. After deciding your telephone needs you must find a plan that is affordable and that meets your needs. Consider questions such as: How many minutes of airtime do you need? Of those minutes, how many are day minutes, how many are evening or night minutes? Is the phone for your use only? Or do other members of your family also need a cell phone. If so, a family plan may be the best for you. A family plan provides several phones at a discount and shared minutes. Also, some plans do not count the air minutes between phones on the same plan. What special features do you need (or want) on your phone? Numerous options are available, for example, phones that take pictures, receive text messages, have simple games, call waiting, etc. You pay a fee for these options. There is a new type of phone out that targets young children. It limits the calling options to 4 or 5 pre-selected individuals and incoming calls to parents or a very few selected individuals. User Needs Low or emergency users simply want a cell phone for emergency use. They may use a prepaid phone or a basic contract service. They need a small amount of time and look for a low monthly fee for service and possibly to pay for each call. Local users do make or receive many calls from outside their home area (an area specifically designated by the service contract as the area where calls can be made without additional charges.) If a call is made beyond the home area it is called roaming. There is a charge for roaming. Local users are often young people or students who talk with friends and family throughout the day. They often use a lot of airtime. Families also use cell phones to keep in touch with each other to manage busy schedules. Long Distance Users are those who talk with people outside the local calling area. Shoppers have the option of choosing a cell phone plan that includes long distance calls made without adding roaming fees or choosing a less expensive plan that assesses roaming and long distance charges for calls beyond the local area. Check to see if the calls can be made from any place or must they be made from inside the home calling area. Make sure the service provider has enough towers in the areas you wish to call to give good reception.

21 Things to consider before selecting a plan Who will you call? Where are they located? Cell phone service contracts list the coverage area. This is important because there will be a charge for any calls made to, or received from locations outside the coverage area. On a home phone you do not pay a fee for incoming calls on your telephone. On a hardwired cell phone all calls that you make and all incoming calls are counted against the number of minutes that you purchase on your contract. If the calls are long distance or outside your calling area you also pay an additional fee unless your contract includes long distance coverage. Some cell phone contracts charge roaming fees, (a flat per-day fee) for calls made away from your home location. Some plans also charge a per-call long-distance fee. Other plans include free long distance. With cell phones, as with home phones, there is a time of day charge. Nights and weekend calls are free on some plans and charged on other plans. Per-minute charges are usually more for calls outside your home area. Most, but not all service plans include a designated number of that minutes can be used without additional charge. Some plans include only 30 minutes, others include hundreds or thousands of minutes. With most plans if the minutes included in the plan contract are not used each month you lose them. If you use more minutes than you purchase with your plan, you must pay a fee for each additional minutes used (example $0.25 per minute). Some plans allow you to roll over unused minutes but the plans are often more expensive. Your cellular phone bill will be more than the service contract cost. You must pay county and city taxes plus state and federal taxes. When you obtain your telephone it must be programmed for your telephone number and to access the network. The service seller will usually charge an activation fee. As a promotion the activation fee is sometimes waived. If you purchase a service plan Clearly understand all details of the plan including what is covered and what is not. Keep a copy of your contract and everything you sign. Carefully keep a record of your cell phone use. It is easy to accumulate a big bill if you exceed the number of minutes purchased.

22 Pay your cellular phone bill as quickly as you receive it. Bills that are paid late or are unpaid will damage your credit record. Keep the receipt or cancelled checks to verify your payment and the date. Comparison shop for your cellular phone service. Consider specials. There are differences in prices and services. Read all details of the contract very carefully. Preparing for a Program Read teacher s guide and member s booklet. Ask 4-H ers to read their booklets. Read additional materials. Review ads, look for details and collect ads to bring to meeting. Ask 4-H ers to bring any cell phones they or their parents may have and to also bring a description of services covered in their contracts. Ask 4-H ers to also find out the cost of the monthly cellular service. Contact a cellular phone service center and salesperson at an electronics store that sells cell phones and service to schedule a tour. Presenting Programs Ask how many 4-H ers have cell phones and how many want them. Ask 4-H ers to: o Estimate cost of cellular service. o Describe service restrictions. o Calculate how many hours of work at minimum wage would be required to pay monthly service bill for an average user and a heavier user. o Describe under what conditions a cell phone would be beneficial, a convenience, and wasted money. Carry 4-H ers on a field trip to see different types of cell phones and service contracts. Ask salespeople to explain different service plans in detail. Evaluate learning with pre and post test. Prepared by: Mary N. Harrison Professor, Consumer Education

23 Keeping in Touch (Contracts for Cell Phones) Sample Judging Situation Betty is working to save money for college. She has a job working at a department store from 4 until 8pm. The pay is good but her parents are concerned about her driving alone at night on a lonely dark road. Her parents have agreed that if she will get a cell phone to use for emergencies they will not object. Betty is considering the four following options. Help her find the best choice for her needs. Look for an inexpensive system that will enable her to contact help if she should feel unsafe or need help. Betty must pay for the phone and service from her earnings Phone cost $9.99 with 2-year service contract. Service contract (2-year) $35.00 per month. The contract includes 150 anytime minutes plus 3000 night and weekend minutes. No roaming charges, no long distance charges for a limited time. Over time limit charges of $.35 per minute. Activation fee is $35.00 Phone $40.00 with a 1 year contract. Service contract (1 year) $19.90 per month. No roaming charges in Florida. 90 anytime minutes. Over the time limit charges $.25 per minute. Activation fee $ Phone free with 1 year contract. Service contract $25.00 per month. 60 anytime minutes. $20.00 activation fee. Roaming charges away from home base and long distance charges apply. Phone free with 2 year contract. Free activation. Service contract $85.00 per month. Plan includes 3,000 night and weekend minutes. 500 anytime minutes and free roaming charges and long distance service.

24 Justification: Answers Keeping in Touch (Contracts for Cell Phones) Placing: Cuts: st Place Number 2. The total out of pocket expense for the year is $ (plus Tax), the least expensive of the 4 options. Although she must buy the phone for $40.00 the per month cost of the $19.90 is only $ per year and the activation fee of $25.00 still makes it the least expensive. Ninety minutes per month is adequate for occasional use. 2 nd Place Number 3. The out of pocket cost of $ (plus tax) per year makes it the second least expensive of the 4 options. A free phone plus $25.00 per month ($ per year) service charge plus $20.00 activation fee totals $ Sixty anytime minutes per month is adequate for a phone to be used only for emergencies. 3 rd Place Number 1. Number 1 is more expensive than number 2 and 3 but much less costly than number 4. At a cost of only $9.99 the telephone is inexpensive but at $35.00 per month, the total cost for a year of service is $ Adding $35.00 activation fee and $9.99 for the phone the annual cost is $ With this program she would be buying much time she would not need. Also, this requires a 2 year contract. It is not wise to sign a 2 year contract. 4 th Place Number 4. Although the phone is provided free and there is no charge for the activation fee, at $85.00 per month she would be obligating herself for $1020 per year for 2 years to buy much time for which she has no need. Prepared by: Mary N. Harrison Professor, Consumer Education

25 Gift Cards Member Guide Have you given or received a gift card recently? They are popular with adults and teens love them! There are two kinds of gift cards. There are the multipurpose cards that carry logos such as Visa, MasterCard or American Express and are issued by banks and other financial institutions. They can be used at many different places. The other type of gift card is a store issued card. You purchase that card from the store or its website. It is used to buy only from the issuing store and company. People like gift cards because they make gift shopping easy. You purchase the card, it is personalized with the receivers name and it is easy to mail or handle. The receiver likes it because he/she can select something they want or can use. No more exchanging unwanted or unusable gifts! But there are cautions!! It s very important to read the fine print carefully or the gift can become an illusion. Check fees and dates carefully. Does the giver have to pay a fee to purchase the gift card? If so, a $25 gift card may actually cost you $30 or $35 to purchase. Almost all multipurpose cards require a purchase fee. Will monthly fees be deducted from the card? If so, how much are they? After a few months all of your gift money may be used for fees. For example, if you receive a $25.00 gift card and the card issuer charges a 75- cent per month fee, after 3 months your card is worth only $ Some, but not all, cards charge a small transaction fee for each time you use the card. This is deducted from the total value of your card. For example, suppose you have a $25.00 gift card and it charges a 50-cent transaction fee. You could buy a $24.50 gift. If you bought a $10.00 gift one day and a $10.00 gift a week later you have $3.50 left to spend. If you do not use a card for a few weeks or months, some cards charge an inactivity fee, then when you are ready to use the card your money may be gone.

26 Be sure to look at the expiration date of the card. Most cards close out on the expiration date. You will lose any money left on your card on that date. Convenience and flexibility are the major benefits of gift cards. The value of the card can be used to pay for a purchase or applied toward the purchase of a more expensive purchase. Cards can be stolen and used, but are less likely to be stolen than cash. Some even have some theft protection. Gift cards are intended for the purchase of goods and services, not saving toward some goal such as a college education. ValueLink reported 27% of gift cards are spent within 7 days and 31 % within one month. Many card users add their own money to the card value to get more expensive purchases. If someone gives you a gift card carefully read all of the information about the card and its use. Some cards should be used quickly to avoid loosing value. Other cards can be kept a year before any fees are applied. Gift cards are different and so are the companies that issue them. The card is only as good as the company that issues it. Information may be stated on the card, its packaging or as an enclosure sheet with the card. Keep the information and refer to it when there is a question. It also contains the name and contact information of the company that issued the card. This information is important if you wish to contact the company if there is a problem using the card. Some card issuers have rules that apply to lost or stolen cards. Some will replace a lost or stolen card, some charge a fee for replacement and others offer no protection. A few companies will even reissue a card when it reaches its expiration date; many others cancel the card and keep the remaining money from the card. If you plan to buy a gift card be sure to: Consider the stability of the company issuing the gift card. Buy from companies that will be in business long enough to use the card. Ask if there are rules that apply to lost or stolen cards. Is there any protection? If so, what? Are there fees? What if a stolen card has been used, can funds be replaced?