Family Share Plans 101

Wireless101Cellphones are expensive. You’re either paying every month for a phone you’ll only use in an emergency, or you’re paying significantly more to actually use the devices. But it’s not a luxury expense anymore.

Our lives are increasingly mobile, and the expectation is that no matter where you are, someone can reach you if they need to. On top of that, we like having this connection (at least on most days).  The ability to call someone from the road without having to find a payphone, or upload pictures of your vacation to the beach while AT the beach is something a lot of us enjoy.

But that doesn’t change the fact that it’s expensive.

Yes, you can get a phone with unlimited “everything” from a prepaid carrier for just $50 a month. But what if your spouse wants one too? Then you’re looking at $100. And what if you have kids?

That’s where family plans come in. Family plans allow you to purchase a “bucket” of minutes, text and sometimes data and then add additional lines for a nominal fee, decreasing the cost per line significantly. If you have two of more people looking to get cellphones , this is a great way to lower your monthly bill without resorting to sacrificing features that you want.

But what are family plans, who offers them, and what questions should you answer before signing up for one? That’s where PhoneCan comes in. Join us after the break, and we’ll answer those questions, and more.


How does it work?

A family plan is a special type of plan built around 2 or more users sharing a pool of minutes instead of each line paying for their own. They may also be able to do something similar with texting plans, and even data packages, depending on the carrier.

No matter who the carrier is, however, the basics are the same. The first line pays a higher cost for their line than they would have to if they stuck with a traditional plan, but each additional line after that (typically to a max of 5) pays a significantly lower cost.

If you only have two phones, a family plan will benefit you, but the savings really start to jump at that third line. Let’s look at an example:

John and Jane have two kids (Sam and Sandy). They want to use their phones all the time, but the kids phones will only really be used for emergencies (at least initially). Because of this, they decide to try going the prepaid route. Since they live in the city, they choose MetroPCS for their phones, and pick up some phones from Wal-Mart for their kids to use. They’re considering just a basic plan, and also one where there two kids get unlimited texting, but still only emergency minutes. No one uses a lot of minutes, and most calls will be to eachother.

Carrier John Jane Sam Sandy Monthly Cost
Prepaid $50 $50 $15 $15 $130
Prepaid w/ Texting $50 $50 $35 $35 $170

Now, there are some carriers that might offer cheaper prepaid plans, and for the Kid’s lines, paying a few months in advance gives you a discount on the monthly line, but I took the most common options and used those.

As you can see, the price goes up rather quickly with prepaid the more phones you add. Sure, they could refuse to give their kids phones, or limit them to not texting, but then they’re giving up something they want.

On top of that, you have to pay more (typically) up front for the phones, or have a limited selection of devices. Sure, John and Jane get unlimited data on their plans, but the most advanced device on MetroPCS right now would be considered an entry level device on a major carrier.

So lets look at a traditional family plan and what it gives you. I’ll use Verizon as an example for two main reasons. The first is that it’s the carrier I use, so I am most familiar with their plans and I don’t want to be blamed for misrepresenting another carrier’s numbers. The second is that Verizon has the reputation for being the most expensive carrier, so if they save money on Verizon, chances are good they save money with everyone else.

I’ll show 4 possible combinations. Voice Only, Voice and Text Only, Voice + Data for two parents, and Voice+ Text + Data for two parents. I’m assuming the 700 minute plan here. Add $20 to double the minutes

Plan John Jane Sam Sandy Monthly Cost
Voice Only $60 $10 $10 $10 $90
Voice + Text $90 $10 $10 $10 $120
Voice+Data $90 $40 $10 $10 $150
Voice+Text+Data $120 $40 $10 $10 $180

You can see that until you add data, the plans are actually cheaper on the “expensive” contract plans. Even if you add data, you’re looking at a mere $10 more per month for Data+Text+Voice on contract over what you’d pay with prepay plans.

And if John works for a company that has business lines with Verizon, he can apply for a discount on his bill which can drop the price even further. Small businesses save a minimum of 8% if they just have 5 lines or more corporate liable. If you’re part of a nationwide company (or in the healthcare industry) you could have up to a 25% discount on your monthly bill.

I’m not trying to tell you that prepaid is never the answer here. There are some amazing prepaid plans out there and for single lines, they can be an excellent value. But at the moment, there is only one national prepaid family plan, which is offered through Wal-mart.

Signing Up for a Family Plan:

Thanks to Gizmodo for imageSo what does it take to combine your plans into a family plan? Contrary to the name, it does not require that everyone be related for you to share a family plan.

All that is required for a family plan is that one person is willing to put all the lines under his or her name.  In fact, there are a lot of people who get family plans that are just friends, or dating couples who set up a family plan to save money on their monthly bill.

But before you rush to your store of choice to sign up for a family plan, you need to know a few things about what a family plan entails.

First and foremost, the person who is the “head” of the family plan is directly responsible for ALL costs incurred on every line on the plan.  This means that if your best friend decides that he wants to buy $150 in ringback tones and refuses to pay you, you’re the one who needs to cough up the money.  Companies won’t waive charges because someone you gave the phone to wasn’t responsible.  Likewise, if you don’t pay the bill because your friends didn’t pay you, it’s your credit rating that will take a hit, not theirs.  A family plan is YOU buying multiple phones, not your group getting a plan together.

Because of this, the head of the family plan also has direct control over the family plan.  They are allowed to use your upgrades how they see fit, and if you tick them off they can shut off your service because it’s their phone.  They can also add and remove features whenever they want without your consent.  If your relationship sours they can terminate your line and not allow you to port out the number.  Again, all the lines are held by the person the bill comes to, not who uses the phone.

I’m not trying to scare you away from family plans.  They’re a great value, but you should understand what you’re signing before run to the store.  If you’re considering signing a family plan in your name, know that you’re responsible for everything that happens on all of those phones.  If you’re looking at allowing someone to take over your number and put it in their name, make sure the person’s level headed.

But say you understand all that, and you decide a family plan is still the best way to lower your bills.  If you’ve never had a cellphone before (or keeping your number isn’t important to you) it’s as simple as the head of the family plan setting up a new line and handing you the phone.

If you want to keep your number and you’re on a different carrier, you need to port your number.  You can do this by taking your account number and password for your current account with you when you go to sign up for your new phone on the new carrier.  Note that porting your number counts as cancelling your service with your old provider, so if you are still under contract, this could mean paying and early termination fee.

If you both already have the same carrier and you both want to make a family plan, you need to do what’s called an assumption of liability.  We’ll post this in Quickies soon, but theses are the basics:  First, the person giving up their line contacts customer service and gives them the name of the person assuming the line permission to do so.  Then most carriers have a liability department that the person taking over the phone will call.  Once both numbers are in the same person’s name, you can combine them into a family plan.

Then it’s as simple as choosing your plan.

Leaving a Family plan:

There are several reasons you’d want to leave a family plan.  Maybe you just turned 18 and want to get your line in your name to build your credit.  Or maybe you’re moving to a different town and you don’t want to mail your check to the account holder every month.  Maybe you just want a different carrier, or your relationship with the account holder isn’t what it once was.

The process for leaving is much the same as it is for joining a family plan.  If you don’t want to keep your number, just hand over the phone to the account holder, and go pick up your new one.

Porting out the device requires the account number, and the information of the account holder, and if you’re keeping your number and your carrier, follow the assumption of liability instructions above.  Remember that the account holder has to give permission for you to port out your number, so keep that in mind when deciding if you’ll combine into a family plan to begin with.

Closing Thoughts:

Family plans are excellent money-saving tools.  My family has five phones on the plan, three of which are Android devices.  Thanks to the account holder’s discount (17%) our monthly bill for unlimited everything we care about comes to just $50/mo per person and that’s on the “expensive” carrier.

If you understand what you’re getting into, they’re a great way to save a little cash.  I know this guide didn’t give you all the pricing you might’ve liked to see, but the reality is that every carrier will have their own plans (with their own costs and benefits) and listing all those here would make this article more than a giant wall of graphs.

At PhoneCan, we want you to give you the tools you need to get the plan that offers you what you need at the best pricing possible.  If you feel we’ve left something out, or you have any further questions, feel free to Contact Us, or leave a comment below.