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Get the Most from Your Long Distance Dollars

By Remar Sutton, DCU StreetWise Spokesperson
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Ads for "dial-around" (10-10) numbers are everywhere on TV. Prepaid phone cards hang by the checkout in almost every store. Can these long-distance services actually save you money? Are there other ways to save? The answer is yes – but only if you do some comparison shopping and stay alert for hidden charges.

Dial-Around Numbers
"Dial-around" numbers are the access numbers, such as 10-10-XXX or 101-XXXX, that provide access from your home phone to a long-distance carrier other than your selected home long-distance service. The charges for these services appear on the monthly bill for your local service.
Dozens of dial-around services are available in any given geographical area, and one might be right for you. But in checking out and comparing services, use the following tips to look for policies and charges that can make the calls much more expensive than their advertised rate.
  • Check the rates and the billing intervals. For example, a service may advertise "$0.50 for up to 8 minutes," or "only $0.99 for calls up to 20 minutes." Watch out for words like "up to." If an ad states up to 20 minutes, in most cases the charge such as fifty cents or ninety-nine cents or whatever applies to all calls that are less than and up to that time limit. So if a call reaches an answering machine or the conversation lasts 10 minutes less than the featured time limit, the company still charges the full amount. Depending on the call, such services may still offer savings or may not be cheaper than other options.
  • What is the rate per minute when the call exceeds the specified minutes? For some services, these rates may still be less than other options; for other services, these rates jump exorbitantly.
  • What are the monthly charges, fees or surcharges, if any? Common fees and surcharges include per-call connection fees (fees charged for every call in addition to the per-minute or time-interval charge), monthly service fees, and a USF – Universal Service Fee – that is a government-initiated surcharge. Some of these fees can range from a fixed rate per month to a percentage of your bill.
Determining the true cost of a call made using dial-around services requires considering and adding all these factors. Use 10-10-phonerates.com to obtain a list of dial-around numbers for your area and information to compare rates.

Prepaid Calling Cards
These cards (or services) allow you to pay first and call later. Cards come designated with either a dollar value ($10, $20, etc) or number of minutes (100, 500, 1000). These cards may be used from any phone, though pay-phones and hotels may add an additional charge for their use.
Using the card requires dialing an access number and then following the instructions. But choosing the right prepaid phone card can mean that punching in a bunch of numbers can offer real savings, particularly if you travel a lot or otherwise use a standard charge phone card offered by various phone carriers.
Prepaid calling cards may be purchased from such locations as post offices, discount chain stores, shopping clubs, convenience stores, gas stations, vending machines, and the grocery store as well as by mail and over the Internet. But the actual cost per minute of such cards can vary widely between cards and can vary greatly from the rate-per-minute displayed in bold type on the sales display or packaging cover.
Use these tips to help evaluate potential savings using prepaid calling cards:
  • What are the actual rates for the calls you plan to make? Check the fine print. There may be different rates for in-state and out-of-state calls. Usually, different, higher rates are charged for international calls. These may still represent savings, but compare first.
  • Is there a connection fee per call? Some cards charge these; others do not. These fees can range from a few cents to a couple of dollars.
  • What are the service or maintenance fees? These fees, if applicable, may be deducted from the card on a daily, weekly, or monthly basis.
  • What are the taxes and government surcharges? These fees (one is the Universal Service Fund) range from 7.5% to 15%.
  • Does the card have an expiration date? Some cards have one and if you don't use all of your time before the date you will lose the remaining value.
  • Are there other restrictions and limitations? For example, the card is not valid for international calls or can be used at the lowest rate only during certain hours. Many cards are only valid for calls made from the U.S. If you plan to go abroad, it is possible to get cards that are valid in other countries.
To determine the actual cost-per-minute of prepaid calling cards, all these charges must be appropriately added together.
For more information about evaluating and selecting the best prepaid phone card for your needs, read Getting the best value from Prepaid Phone Cards from Consumer Action.

Long Distance Carriers Calling Plans
National carriers such as AT&T, MCI, and Sprint and regional carriers like Verizon and SBC Communications offer a variety of calling plans that may offer savings over "basic rates" to customers. Such monthly plans can vary from unlimited calls for a flat rate to low per-minute rates with and without a monthly fee. Check their web sites for details on the plans available in your area and compare them to your other options.

Saving on International Long Distance
You can save money on your international calls through any of the above methods. Dial-around companies may provide a better rate than your chosen long distance carrier. Many of the long distance carriers offer International Plans in addition to your regular plan. Some prepaid calling cards can be used for international calls. Also, some of the dial-arounds offer better international rates than the international calling plans.
Check out these FCC Consumer Facts about the choices for making international long distance calls.

Comparing Savings Options
As you check out various options for saving on long distance calls, use the following checklist from the FTC (in addition to our tips) to find out the same vital information from each option. That way you'll be comparing "apples with apples" not "apples with grapes!"
  1. Check all the information related to price.
  • Is there a monthly fee? Are there any surcharges?
  • Is there a minimum charge for each call?
  • Is there a climbing rate?
  1. Check out the restrictions on the advertised rates.
  • Is the rate only available at certain times of the day or certain days of the week? If so, what is the rate at the other times?
  • Is the rate the same for calling a person located in your same state and located in another state? If not, what is the rate?
  • Is the rate only good for a specific period of time? If so, what will the rate be after the special period?
  1. Figure out the comparative claims.
  • What is the basic rate? Ads may promise that the rate is 50% off the basic rate. Well, the basic rate is just another way of saying the highest rate.
  • When ads are using comparisons, are the services actually the same? Is the data used the most concurrent for all the information?
  1. Read the fine print.
  • It may contain the restrictions and other very important information.
  1. Check your monthly phone bills very carefully.
  • Make sure you have been charged exactly what you expected.

So, what do you think?
If you find this review helpful, please pass the word to your friends. Also email me with any comments or suggestions.
Remar Sutton

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Digital Federal Credit Union
Digital Federal Credit Union
220 Donald Lynch Boulevard
PO Box 9130
Marlborough, MA 01752-9130
508.263.6700 • 800.328.8797
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