How to Not Get Screwed with Your Cell Phone Abroad

Before I get started with today's article, I want to give you all a heads-up that next week Doug Casey and I will be venturing to the crisis-stricken island of Cyprus. We've got something exciting planned for our return, but we're not ready to share all the details just quite yet. But, if you've been to Cyprus recently and want to share anything with us – from a market insight to a restaurant we shouldn't miss as we keep our tanks full for what will definitely be a packed agenda – just drop me a line here. And now, on to today's article.

It's no secret that cell phone service providers seek to nickel and dime you for anything they can get away with. Perhaps the most significant arena in which this occurs is when someone takes their cell phone abroad.

Though the phrase 'nickel and dime' hardly seems appropriate anymore. Both due to the fact that the nickel and dime coins have been inflated into irrelevance and that "shock" cell phone bills received after international travel can easily reach into the thousands of dollars – unless proper precaution is taken.

I am sure many of you have heard horror stories about someone who took their cell phone abroad and unknowingly racked up an unbelievable phone bill. Without getting an international plan, many providers charge obscenely high rates, especially for data usage. Some can be as high as $20 per megabyte.

I have a friend who took his cell phone with him on an international cruise one time. He wanted to check the score of a sports game, so he turned on his cellular data to access it. After he was done, he forgot to turn it off and it accidentally remained on for the rest of his trip. Some applications running in the background continued to consume cellular data unbeknownst to him, and upon his return he was slapped with an $800 bill.

Such stories are not uncommon.

Fortunately there are a couple of things you can do to make sure you don't get screwed when taking your cell phone abroad:

1. Check to see if there are international plans from your current provider and compare their costs with #2 and #3;

2. Obtain a SIM card from a local provider in a foreign country during extended stays;

3. Obtain a prepaid international SIM card for short visits across multiple countries.

First, you should check with your current service provider and see if there are any international plans/options that can be used for the countries you intend to travel to. They probably will have some options available, but they will likely be more expensive than the other options – especially if you plan on staying in a foreign country for an extended period of time.

Second, if you plan on spending an extended amount of time in a certain foreign country, it may make sense to buy a local SIM card to obtain a local number. It will most likely be much cheaper than paying the international roaming rates from your domestic provider to use your domestic number in that foreign country.

Though this can only be done if your phone is unlocked. If you obtained your phone from a US provider it is almost certainly locked. This means that you cannot use it with a different service provider (either in the US or internationally). Most US providers will give you instructions to unlock your phone if you explain to them that you are travelling internationally and intend to remain their customer when you return home. However, if they refuse, you will have to purchase a separate unlocked phone (there are plenty listed on eBay) that can be used with foreign service providers.

Although buying a local SIM card in a foreign country makes sense for extended stays, it may not be an economical strategy for short visits across multiple countries. In that case, there are other solutions.

Third, there are a number of companies that provide prepaid SIM cards that can be used internationally and often provide rates that are a fraction of what a US provider would charge for international roaming. These prepaid international SIM cards are ideal for short trips across multiple countries and require an unlocked phone.

They also have the advantage of being prepaid. Thus, you don't have to worry about accidentally leaving on a data-consuming application and coming home to an $800 bill; you will never spend more than what you prepay.

It is difficult to say which company is "the best" since they offer varying services and different rates depending on which countries you visit. To find which one is best for you, compare their rates across the countries you intend to visit.

A list of prepaid international SIM card companies is below:

http://www.maxroam.com/

http://www.telestial.com/

http://www.roamsimple.com

If you follow the steps outlined above, you will be able to find the most economical path possible for using your cell phone abroad.

Nick Giambruno

Nick is Doug Casey’s globetrotting companion and is the Senior Editor of Casey Research’s International Man. He writes about economics, offshore banking, second passports, value investing in crisis markets, geopolitics, and surviving a financial collapse, among other topics. He is a CFA charterholder. In short, Nick’s work helps people make the most of their personal freedom and financial opportunity around the world. To get his free video crash course, click here.

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