What Data Plans Are, How They Work & What They Cost

Chances are that if you have a cell phone or tablet that you have a data plan. And if you don’t know what data plans are, or what “data” consists of, then it’s about time you get up to speed. You might be able to save some money in the process.

So, what are data plans? Data plans are what you can buy so that you can access and do things on the internet. It’s just like minutes for cell phones, but instead of minutes, data is used as the consumable.

Data plans cover anything and everything that you do online, and can be consumed from any device, as long as it can access the internet.

Ok, so then what do you define as “data?” Data is literally everything that you read, watch or down/upload online. That means your emails, pictures, files, videos, music and video games. Anything that has a unit of measurement next to it (Kb, Mb, MB, Gb, GB, etc) is data, and will affect you in or way or another.

Now that you know what data plans are and what data consists of, then hopefully you see why it’s important. All mobile internet plans are priced on the amount of data you plan on consuming, and the scary surprise bills you hear about are a result of someone using more data then they were supposed, and ended up paying a premium for.

Determining How Much Data You Need

I may have just scared you, and for that, I apologize. But now that I have your attention I’ll now explain how to determine how much data you need and how to monitor so that you pay for only the amount of data you need (and use).

Unlimited data plans are starting to become a thing of the past. There are a few companies, such as Clear Wireless, that still offer unlimited plans. But who knows how long that will truly last, as companies that used to offer unlimited data, such as Verizon and AT&T, are now placing caps on their fixed and wireless internet connections. This is to combat heavy use by a small percentage of users.

Tiered monthly data plans are relatively expensive too, so you’re going to want to come up with a solid estimate for how much data you’ll need to avoid over paying.

One way to do that is trial and error. Get a plan slightly bigger than what you think you’ll need for the month and at the end of the month see how much data you’ve used. If you used too little, then downgrade your service (or vice versa). I say to get more than you think you’ll need because going to the next tier could easily be cheaper than paying overage fees depending on how far over your limit you go.

Another trial and error approach is prepaid internet. Get a prepaid internet card or USB and see if you run through it all in a month, or how much more you needed to buy. Going this route could easily be the same price as my suggestion above, though.

You could also use a calculator provided by the internet service provider. Many ISPs offer calculators on their sites. You can enter in how much data you expect to use between emails, videos, games and pictures, and the calculator will tell you roughly how much data you will use. Here are calculators for you to check out.

How Much Data Costs

Here is a table that might help you figure out how much you need, and below that are estimates that you can use to figure out how much you’ll pay.

The cost for data plans will depend on how you’re going to consume data. Prepaid, for example, is the most expensive from my experience. You’ll pay something like $80 for 5GB of data, whereas a monthly contract with Verizon will get you 10 GB for $80. Clear Wireless is $35 per month with no data caps, but then you don’t have the convenience of mobile internet like you do with Verizon. So the costs will depend if you use data from home on a fixed line or mobile.

On top of all of that, you have the extra costs of exceeding data caps.

Understanding Data Plan Caps

Data caps are limits that internet providers put on their plans. These are in place to prevent the people who use the internet too much from hogging it and making the internet connection congested and slower for everyone else.

Caps will vary from company to company, as will the consequences for exceeding the data cap. The most common punishment for using too much data is paying an overage fee. This varies too, but a safe estimation is at least 10% of your monthly contract for every GB extra you use.

If an ISP doesn’t charge you extra they might throttle your bandwidth, making it slower for the rest of your term until it resets the next month. In a worse case scenario, like one that you could experience using Comcast, you could end up being suspended from their service for a year. One guy found that out the hard way.

Most times, though, you only have to worry about exceeding your data plan if it’s a mobile plan where limits are 2 to 20 GB. Although fixed internet connections have data caps now, they’re in the range of 200 to 250 GB per month, which only a small percentage of users ever get near.

Monitoring Data Usage

As you can probably tell by now, you ought to know how much data you have to use each month, and more importantly, how to go about monitoring it. You have a couple of options:

Most of the internet providers, at least the bigger ones like Verizon, AT&T and Comcast, will alert you via your phone, tablet, email or phone at different usage points (50%, 75%, 90%, etc), too, just to let you know where you’re at so you can make adjustments to your data consumption needed.