Phone service is a monthly expense that can easily get out of control if you let it. If making calls from home or on your cell phone has you dipping into retirement funds to pay the bills, there are things you can do to get costs under control. Here are seven tips to help even big talkers pay less for phone service.

1

Choose an unlimited plan. For less than $50 or so a month, you can get unlimited local and long-distance landline service, a good option if you use the phone a lot at home. But before you sign up, review your past bills to make sure you'll make enough calls to justify the fixed monthly bill.

2

Try an alternative carrier. Some long-distance service "resellers" will time your calls in as little as 6-second increments. That differs from traditional companies, which generally round up to the next full minute. For example, if you talk for 10 minutes and 4 seconds, a traditional company might bill you for 11 minutes, while an alternative carrier might charge you for 10 minutes and 6 seconds. And alternative companies charge some of the lowest rates for long-distance and international calls.

For instance, ECG Long Distance charges 3.5 cents a minute for interstate long-distance calls and as little as 3.5 cents a minute for in-state long-distance calls, with no monthly fees or minimum call requirements. Some companies offer even lower rates—as little as 2.5 cents a minute—if you're willing to accept online billing. You might also have to pay a service charge for any month you don't use enough long distance.

3

Use a card for long distance. You can use phone cards from any phone at home or on the road. At Costco, we found a 700-minute prepaid card from Verizon for $19.99, which works out to less than 3 cents a minute. Some lesser-known companies have even lower rates. Prepaid cards for international calls can be trickier to assess. Although they are sold in U.S. dollar denominations, just like domestic cards, the per-minute rate depends on where you're phoning. So check rates for the countries you're likely to call. And whether it's a domestic or international card, find out if the minutes expire. Also keep in mind that you'll probably pay a surcharge if you use the card at a pay phone. The Verizon surcharge, for example, is 95 cents a call.

4

Reach for your cell phone first. If your wireless plan provides free evening and weekend calling, or free calls to certain people, don't forget to use your cell phone instead of your standard, pay-by-the-minute long-distance service on your landline.

5

Switch to VoIP. Voice over Internet Protocol transmits calls over the Internet. Services such as Vonage or Verizon's VoiceWing provide unlimited local and long-distance calling for about $20 a month, plus $40 or so a month for broadband or DSL service. If you opt for VoIP, we recommend that you also keep a landline so that you'll have service available during power outages or other emergencies. That can add another $20 or so to your monthly tab. Also find out about any setup or activation charges.

Before signing up, ask the VoIP provider how its service works with 911 and the newer enhanced-911 (E911) emergency service. E911 transmits your telephone number and location to an emergency operator, a capability not all VoIP systems have. Make sure your VoIP provider has your correct address, so that a 911 operator can locate you in an emergency.

6

Go all cellular. Another option is to use your cell as your only phone, as 14 percent of households now do. That choice may be especially economical if your contract provides more time than you're using or if you can add minutes inexpensively. But as with VoIP, cell-phone networks might not work in a power outage. Plus, your cell phone might not work well in every location in your home.

Adding minutes to your plan, even if you don't use all of them, is usually cheaper than going over your allotted time. But any such change in your service might trigger another multiyear agreement with punitive early-termination charges. And again, ask your wireless provider how its service works with E911, especially for emergency calls made from your home.

7

Consider prepaid cell phones. If your children's endless chatter on your family plan is running up your bill, think about switching them to a prepaid cell phone, which provides a set number of minutes and might give them a useful lesson in budgeting. With prepaid plans from T-Mobile and other companies, after you buy a minimum number of minutes, usually $100 worth, you're not required to buy more for an entire year, assuming you don't use them up before then. If you use your cell phone sparingly, prepaid might even be worth considering for yourself.