How to Save Money on Your Internet Bill
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Can any of us really do without internet these days? Employment, education, and even daily communication often depend on a fast, reliable internet connection.
There’s no denying that the demand for speedy internet service is high. But that doesn’t mean that your internet costs should also skyrocket on your monthly bill.
Internet providers want to keep your business by offering the best internet speed and performance. But ISPs are also in the business of making money. Your provider may surprise you with hidden fees or increases in your monthly plan pricing. Or you may not know that your deal with your ISP is outdated. Another provider may be offering much better prices in your area.
Even if you are on a contract with your current ISP, there are still many ways to save money on your internet bill. Read on to find out why your internet prices are high, and how you can pay the lowest internet prices possible.
What Makes Your Internet Bill Go Up?
Your internet service provider is in charge of providing you with reliable internet access. Good service allows you to enjoy high-speed internet and streaming video without interruption, at any time.
In the United States, the 2023 market size for internet service providers is $143 billion. In the last five years, the market has added over $18 billion in sales to its customers. Clearly, internet service is more popular and widespread than ever before.
When a service becomes more popular and available, prices usually tend to go down. But thus far, that hasn’t happened for internet service.
It’s a hopeful sign that in selected areas, some fiber providers have started to offer first-tier plans as low as $20/month. In general, though, plans still tend to start their lowest monthly pricing at around $50/month.
So, what exactly is making internet providers charge so much for an internet package?
The Race for Faster Speeds
One of the most common reasons internet providers raise their prices is their race to improve internet speeds.
113 million users are now streaming HD movies and playing real-time multiplayer games. For those millions of users, download speeds are critical. Most of us know from experience that slow internet speeds cause glitching and freezing during our online entertainments.
All the major ISPs want to provide fast download speeds. And right now, the technology with the fastest speed is fiber.
For example, AT&T Fiber now offers many customers a maximum possible speed of 5,000 Mbps. That means you could download a two-hour movie within seconds. And even if you connect multiple devices, the speed and smoothness of your internet connection would remain constant.
Other providers have jumped into the race to offer faster and faster speeds. Even though cable providers can’t compete with the top speeds of fiber providers, they can still provide very respectable download speeds with today’s technology. Spectrum, for example, now offers speeds close to 1,000 Mbps.
As providers try to stay competitive, they often raise their prices so they can improve their technology and infrastructure. While that’s good for your internet speed, it’s not so great for your wallet.
Internet providers sometimes put limits on your internet usage that are known as data caps.
Some providers such as fiber companies and cable companies either have no data caps or use data caps that are so high that customers seldom reach them. If your data cap is 1 terabyte (TB) per month, most average users will not come close to using all their allowed data.
But satellite internet providers and fixed wireless internet providers often have much lower data caps due to their more limited bandwidth. To keep usage fair, they have to limit each customer to a data cap that can often be fairly low, say, 150 GB per month.
Data caps can prevent you from having low-cost internet services.
When you go over the data cap (and many customers do), the ISPs have the power to throttle your service. Throttling means an ISP will slow your internet speed so much that you can no longer do anything on the internet except simple text emails. Your speed may drop from 25-100 Mbps to only 1 Mbps.
Your provider may offer you the chance to buy extra data for that month only, so you can keep using your internet at normal speeds.
An ISP may also use data caps to trigger price hikes. Your provider may automatically upgrade you to a plan with higher data limits — for a higher price.
In the worst cases, your internet provider may just charge you high fees for your data overages. This practice is even less pleasant than throttling, as you may not know what happened until you get your big internet bill.
However your ISP handles data caps, you may end up paying more for your internet service. But if that happens to you, don’t let the hassle prevent you from finding ways to save money on your internet bill.
Equipment Rental Fees
Another easy way for an Internet provider to spike prices is through rental fees. If you don’t own your modem and router, your provider can rent you what you need for an extra fee every month.
It’s convenient at first. But it’s another way for your service provider to charge you extra fees. Anytime there is an upgrade on equipment, the new modem or router may increase the cost of your monthly bill.
If you decide to buy your own modem and router, make sure they’re compatible with your ISP’s service. Providers vary in their equipment requirements.
Not every modem and router will work well with each provider’s connection. If your equipment isn’t compatible, you’ll have to pay for a rental.
Some internet service providers are now providing free equipment to you with no increase over your monthly plan cost. Pay attention when you are comparing plans to see which providers are charging extra equipment rental fees, so you will know the real total monthly cost of your plan.
How to Save Money on Your Internet Bill
To lower your monthly charges, you may have to make adjustments to the way you use your internet.
You can make small changes such as buying your own modem and router. You can even switch to a cheaper service.
Remember that you have options. You don’t have to be stuck for years with the same service and prices. As long as you’re proactive about reducing your bill, there are ways to find low-cost internet service.
Explore Other Internet Provider Options
Before you take any other steps, make sure you have explored all your options for internet service providers. In the United States, there are 1,374 Internet providers. There’s a good chance that you have at least three or four providers in your area. (The major exception is if you live in a very rural or remote area that only gets satellite internet service.)
All major ISPs offer a variety of packages that include Wi-Fi and a specified download speed. Narrow your options by comparing your internet price with your current provider to the other providers. See how much speed you can get with another service, check equipment fees, and note whether you’ll have to sign a contract for a year or more.
If you’re considering making the switch to another provider, read the fine print with care. Pay close attention to any contracts with early termination fees. You never know if you might need to switch again, so understand how much it would cost you if you left your contract early.
If you don’t want to go through the hassle of switching providers, you don’t have to. You can use the better deal you found as a way to negotiate better pricing with your current internet provider.
If you’ve been with your provider for a few years, they’re likely to negotiate with you at a fair price.
Lower Your Internet Speed
Many customers are unaware that they don’t need top speeds for HD video streaming. Contrary to popular belief, you don’t need 1,000 Mbps to stream in HD.
You only need 25 Mbps download speed for HD video streaming through Netflix. Many internet providers will try to sell you a plan with 500 Mbps download speed. For fiber and cable internet, 500 Mbps tends to be presented as a standard, middle-of-the-road pricing package.
If you live alone, don’t play real-time games, and don’t videoconference or upload video, there’s no need to be paying for all that internet speed. Conduct a speed test to see your real current speed (also called “throughput"). And then, consider downgrading your speed to reduce the bill. Many households don’t need any more than 100 Mbps download and 10 Mbps upload speed.
You’ll still be able to spend as much time as you want web browsing or watching streaming TV. But you’ll do so with a monthly discount since you won’t be paying for the fastest internet anymore.
Lower Your Data Usage
To save money on your internet bill, you can also lower your data usage. Data caps are one of the most common ways for providers to add fees to your bill.
Data caps work by imposing a limit on your web browsing activity.
Let’s say your internet plan comes with a data allowance of 50GB per month.
If you ever go over 50GB, two things can happen. Your ISP will charge you an extra fee for every GB of data you go over. Or, they will throttle your service so that you’re not able to do anything but very low-data activities, such as text-only email.
But maybe you will never go over that low data cap. If you only use the internet to check e-mails and shop online every once in a while, why pay for a high-data plan you don’t need?
You may not know how much data you’re using, so here’s a quick overview.
Common internet activities with typical data usage
- Check e-mail, Google searches: 10-25MB/hour
- Streaming music: 150MB/hour
- Online gaming: 300MB/hour
- Facebook: 500MB/hour
- Videoconferencing: 1.5 GB/hour
- Streaming HD video: 3GB/hour
Buy Your Own Equipment
Another way to save money on your bill is to invest in your own router and modem. In the long run, buying your own equipment can be less expensive than paying a couple of years of rental fees.
One important factor to keep in mind: routers and modems are not always portable from provider to provider. If you’re thinking about buying your own router and modem, you’ll want to make sure that you’re not planning to switch providers again within a year or two.
As a rule of thumb, always double-check with your provider to make sure your modem and router will work well with your service.
Look Into Deals and Promotions
If you’re serious about switching providers, pay close attention to sign-up promotions. These special deals are typically offered to new customers when they first sign a new contract.
Although the discount doesn’t last forever, it might give you a free installation or a good discount on your first 6 months of service. It’s also common for providers to give gift cards as promotions.
Even if you’re not a new customer, keep your eyes open for promotions. If you’ve been with the same provider for a while, don’t be shy about asking for discounts. Sometimes, customer service reps have been instructed to give you benefits or discounts if you ask for them.
Why Calling Customer Service Can Pay Off
Sometimes a simple call to customer service can bring you discounts and savings.
There are a few specific reasons why talking to a customer service rep might be beneficial:
- If you originally signed up with a promotional deal, they often reduce the monthly fee to the original promo.
- Match-pricing is common when you’re considering switching providers.
- Your provider may also offer bundled services as a way of combining costs and reducing your overall expense.
Although it takes a few minutes to call customer service, don’t forget that they’re there to assist you. Before you go through the trouble of switching to another provider, try your luck with customer service first.
To prepare for your call, get all the facts down with the prices you want to compare to your current plan. Be proactive and research everything you want to discuss ahead of time.
It’s also helpful to jot down a detailed list of expenses from your last bill. See what they can help you with. And don’t forget to be polite and patient. As the old saying goes, you’ll catch more flies with honey than with vinegar.
More Ways to Save Money on Your Internet Bill
See If You Qualify for the Affordable Connectivity Program
The federal government has recognized the need for people in all households to have access to equal digital opportunity. That means that every household should have access to high-speed internet.
Without a fast, reliable internet connection, people can’t participate in thousands of low-cost educational options or apply for remote jobs. Students may have trouble completing their work or researching projects without home internet service.
To address this inequality, the federal government created the Affordable Connectivity Program in 2022. This program provides a $30/month subsidy for home internet to qualifying households and $75/month for households on qualifying tribal lands.
If your household has an income below 200% of federal poverty guidelines or a member of your household qualifies for certain federal programs, you will qualify for the ACP.
Bundle Your Internet Service with TV or Phone
Many internet service providers provide both internet and cable TV services. Some ISPs partner with other companies to create bundles with deep discounts. You can bundle Wi-Fi, cable TV, cell phone, and landline services.
If you’ve been paying several different bills each month for multiple internet-related services, then bundling may be a good option for you.
Bundling is a great way to save money on individual bills for related services. If your TV provider also offers internet, ask them about their packages.
If you’re already paying for a bundle and you’re not maximizing all the services, consider cutting out services you don’t need.
Use a Mobile Hotspot
Mobile hotspots are a great way to save money on your internet bill at home, because you won’t need full-time internet connectivity. This hotspot option is good for people who know they’re not going to rely on the internet too much or who are always on the go.
There are pros and cons to relying on a mobile hotspot. The great thing about a mobile hotspot is that you can take it anywhere. It doesn’t matter if you’re in a rural area or sitting at a busy Starbucks downtown. Wherever you go, the Wi-Fi will go with you.
The negative is that a hotspot will not be cost-efficient in the long run for average data users. Mobile hotspots work by charging the customer for the amount of data they consume. Although you can add more data to your plan, you’ll end up paying a lot more than if you stay with a traditional plan.
Split Your Internet Bill
Splitting your internet bill is a good strategy when you have multiple adults living in a household. The way it works is simple.
When you first sign up for services through a company, you’re likely to be getting a promotional deal for the first year. As the 12-month period comes to an end, cancel the plan and ask someone else in your household to sign up as a new customer.
The customer service rep will offer a promotional deal again. Once the person signs up, everyone in the household can enjoy an extra year of discounted rates.
This strategy only works when you’re on a monthly, no-contract plan. If you’re in a contract that binds you to finish the year, then you can’t cancel without early termination fees.
As always, make sure to read the fine print and see if your ISP has any rules about this. Sometimes they consider this type of tactic a violation of their terms.
FAQs: Lowering Your Internet Cost
How Can I Reduce My Internet Bill?
Take a look at your current bill and read all the details to understand what charges you’re paying and why. The best way to reduce costs on an internet bill is to cut out the parts of the service that you don’t use as much.
If you spend a lot of time web browsing instead of playing online games, then you can forgo large amounts of data. Or you can reduce your internet speed to a speed that’s not as fast but still feasible for the amount of time you spend online.
You can also negotiate with your provider. You’re the customer, and the service should benefit you, not the other way around. Make sure you do your research and know what other ISPs are offering so you can haggle like an expert.
Why Did My Internet Bill Increase?
There could be multiple reasons for price hikes. If you signed up with a promotional offer, then once it expires, you’ll be charged the full price.
Upgrades may also increase the cost of rental equipment. There might be a clause in the contract that says your ISP can increase the price every year. If there is no contract or agreement, then they are free to increase prices at will.
Look at your bill and see if there’s anything that stands out to you. When in doubt, call your customer service department and talk to them about your concerns.