The Basics: Understanding Your AT&T Bill

Despite the best efforts by carriers to simplify their billing, wireless bills can be confusing.  To make matters worse, no bill is more likely to fluctuate than your wireless bill.  Extra charges can be caused by a variety of things but primarily they come from overages, fees or proration.

Join Phonecan as we tackle AT&T’s wireless billing.  We’ll break down how usage, service, fees and taxes appear on your monthly statement and explain the terminology that AT&T uses in their billing.


Advance or Arrears?

A vast majority of AT&T accounts are on “advance” billing.  It is a fairly common misconception that advance billing means paying for “next month.”  Advanced billing actually means that you pay for the service for the bill cycle you are in.  That would be paying for “this month.”

All the details on the bill for the calls, texts and data you used are for the bill cycle you’ve just completed.  Because all the usage on the bill is for last month the “bill cycle date” listed on the top of your bill is always for last month.

A tiny minority of older accounts are grandfathered on arrears billing. Arrears billing is paying for “last month.” 

 To see if your plan is being billed in advance or arrears you’ll need to look at the “wireless detail” section of the bill.  Next to every plan and feature that is being billed it will show the dates you are being billed for those features.

Monthly Service charge

The monthly service charge is a fairly straightforward category on the bill.  Take your voice plan and all your features and add them together.  This is your monthly service charge.  This category only really gets confusing if there’s proration on a bill, which we’ll revisit in just a bit.

Usage Charges

If your bill is fluctuating or just ridiculously high one month this category is usually the culprit.  Any service you use on your phone that is not included in your plan and features is a usage charge.  If you use a service you’re not subscribed to (like texting without a texting package) it’s a usage charge.  If you exceed the allotted amount of a service in your plan (like going over the minutes) it’s a usage charge.

Other usage charges can include international long distance or interational roaming and directory assistance calls.

Credits Adjustments and Other Charges

This would be the catch all category of the bill and likely most confusing.  Every bill will have charges in this category.  Looking at a bill with no extra charges it would appear that the taxes are split between this category and the government fees and taxes category.

There is a reason that they’re split.  The taxes that appear in the credits adjustments and other charges category are taxes, but they’re not assessed on you, they’re assessed on your carrier.  Carriers just take the tax and assess their cost evenly across all their lines of service.  They are flat (as opposed to being a percentage of your charges) and are assessed on a per line basis.

Extra charges can also appear in this category.  Typically these will take the form of fees: an upgrade fee, a late fee, a restoral fee (if you’re really late and AT&T shut your service off), an activation fee, a number change fee, a payment fee, etc.

Mobile Purchases and Downloads also appear in this category.  These usually entail games, wallpapers, songs, ringtones, answer tones, subscription services, etc. that were purchased from the AT&T App Center.  If you use AT&T’s music ID service, the charge will appear under this heading.  As of very recently you can bill purchases from the Android Marketplace to you AT&T bill and they appear in this category as well.  There are also a few services can be purchased from the web.

If you’ve received credits, you will find them itemized in this category.

Government Fees and Taxes

Aside from the “split” in the taxes mentioned above this is also a pretty straightforward category on the bill.  These are the taxes that are really assessed on you.

Understanding Proration

Proration, when it happens, can be confusing.  You’ll always see proration on your first bill.  If you see it on a later bill it’s because you made a change to your rate plan or features in the middle of your bill cycle or because a change was backdated.

Changes don’t have to be made effective immediately; they can start on the first day or your next bill cycle or be backdated.  Usually if you’re speaking with customer service they will tell you what option will be best for your situation or give you a few options as to when to make a change effective.   Some proration, such as proration for adding required features during an upgrade, is unavoidable.

Proration can take two forms: a credit or a charge.  If the change that was made is making your bill cheaper- you’ll get a prorated credit.  If a change you’re making is going to make your bill higher you’ll get a prorated charge.

As you may recall, on advance billing you pay for “this month.”  So when your bill was mailed out you were billed for the way your plan was set up on the first day of your bill cycle.  If you add unlimited texting for $20 half way through your bill cycle you weren’t billed to have that feature at all for that month.

On the next bill you’re billed the full $20 for “this month” and a $10 charge for the fifteen days you had the feature last month- that up until now were not billed.  That charge is the proration.

On a backdate you receive the full charge or credit for the price difference.  Backdating is usually only done when you’re at risk of getting overages.  For example, if you had 2000 text messages so far this month but no texting package; you’d be looking at getting a HUGE bill.  If the texting feature is made effective on the first day of you bill cycle, (backdating) it’s as if you’ve had the feature all month.  Backdating in this scenario would create a prorated charge on your next bill for $20.

On Arrears billing proration looks a little different.  A prorated bill will be in between where you were and where you’re going.  If you added $20 texting in the middle of the month your next bill is $10 higher, the following bill is $20 higher.  A backdate on an arrears bill just means that the new plan is reflected on your next bill and not prorated.

Wrap Up

It is a challenge to break a wireless bill into the simplest possible terms.  Wireless bills are just more complex than other bills.  If you review your bill often you’ll start to become familiar with the format and find they will be much easier to read.  If you never look at your bill until it’s more than what you’re expecting it can be a lot to take in. 

If you have questions about your bill customer service can usually explain them pretty well.  Mistakes do happen so if you think something is wrong it never hurts to call to ask about a charge.