If you're like many Americans, you may feel like what you've been paying for cell phone service is too expensive. Fortunately, it doesn't have to be that way.

Don't get locked into a monthly contract

Several years ago, The Wall Street Journal  reported data from the Labor Department that found household spending on telephone services rose 10% from 2007 to 2011 at the same time that it shrunk by 5% on entertainment and nearly 20% on vehicle purchases.

A lot of the run-up in what people were paying could be attributed to having an iPhone through AT&T and Verizon. I hear all the time from people who say they can't leave their cell phone carrier because they're "under contract" or "have a family plan."

The reality is you have to start planning your exit strategy now, regardless of where you are in your contract. If you have a fancy smart phone, especially an iPhone, you can sell it on eBay and probably get enough money to cover your early termination fees. Carriers like T-Mobile will pay your early termination fee all the time and Sprint has run an offer like that in the past. You've just got to keep your eyes open. 

So leave AT&T and Verizon to the big fat cats in corporate America! If you need to watch your wallet, you need to migrate away from them. (Sprint and T-Mobile are in their own orbit and can in fact offer some deals for families.)

In general, you'll get a better deal from any of the Big 5 discounters: Straight Talk, Boost Mobile, Virgin Mobile, Cricket, and Metro PCS. They offer smartphone service that's effectively less than half the cost per line than AT&T or Verizon.

If you're still using AT&T or Verizon, you are throwing away maybe $1,000 a year. Check out these other companies on my smartphone guide and you'll have a great shot of saving big dough.

Image of Clark Howard About the author: Clark Howard

Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. View More Articles

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