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Is Your Phone Price Right?

AT&T, MCI, and Sprint are all advertising new low prices of 5 cents a minute for long-distance calls. Could the offers be as good as they sound?

To find out, you're going to have to read the fine print, study your phone bills and use your calculator.

That's the word from Sam Simon, chairman of the Telecommunications Research and Action Center (TRAC), a consumer watchdog group based in Washington.

"In fact, 5 cents a minute is a great rate," Simon told CBS This Morning Co-Anchor Thalia Assuras. "But you have to know whether there is a minimum, or fees," as well as what you are charged when the rate is not 5 cents a minute.

While "5 cents a minute" sounds terrific, if you don't make a lot of long-distance calls, this is probably not a good option. Some plans require a monthly fee, others mandate a minimum amount of calls, and some have steep peak-hour prices.

You need to know when you call and how long you talk. Then compare the plans. TRAC has compiled its own long-distance rate comparison chart.

"We all call uniquely," explains Simon. "That's why you have to do your own rate comparison. There is no one plan that is best for everybody."

There are a couple of rules of thumb:

  • If you call a lot during the daytime and spend more than $35 a month, then paying a $5-a-month minimum and getting 10 cents a minute during the day is not a bad deal. According to Simon, if you call during the day a lot, that 10-cents-a-minute rate is as good as it gets.
  • If you can call mostly on nights and weekends, there are plans whereby you don't have to pay the monthly minimum. If you move your calls into this period, you may be able to save more.
[To visit the Web site for the Telecommunications Research and Action Center (TRAC), click here.]
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