Sunday, May 13, 2007

Phone Card Fees: Rounding Interval

Most people already know that phone cards have hidden fees and they will pay more than the advertised rate when they make calls with phone cards. Experienced phone card shoppers look for cards with low per minute rates, good call quality and minimal added fees. Phone card companies use a wide assortment of added fees in order to increase revenue. These range from connection fees to maintenance fees and taxes or other surcharges for making calls. They use these added fees so they can lure consumers with low per minute advertised rates. Many high quality phone card providers have reduced or eliminated hidden fees over the past few years as consumers have become wiser and often shun phone cards with excessive fees. However, hidden fees associated with a phone cards rounding interval is still widely used because it is difficult to calculate and poorly understood by many consumers.

The rounding interval defines how the length of a call is rounded in order to determine the cost of each call made with a phone card. Rounding intervals are normally 1, 3 or 6 minutes but they can be as high as 12 minutes or more. The length of a call is rounded to the next interval in order to determine the minutes used in calculating the cost of the call. For example, a 1.5 minute call will be rounded to 2 minutes if the rounding interval is 1 minute, it will be rounded to 3 minutes if the rounding interval is 3 minutes and it will be rounded to 12 minutes if the rounding interval is 12 minutes. For phone cards with high rounding intervals, it is easy to see how it can significantly increase the cost of a call so the user almost always pays more than the advertised per minute rate for each call. The rounding interval provides a built in hidden fee that is not well understood by most consumers but the trick goes even further.

What happens if there is no answer or the phone being called is busy? Most phone cards will start timing a call as soon as it is dialed so consumers should expect to pay at least one rounding interval for a dialed call even if the phone being called is busy or not answered. These charges can add up to a significant added cost, especially if the rounding interval is 6 or 12 minutes.

This hidden fee can be minimized by choosing a phone card with a short rounding interval. In general, phone cards with rounding intervals higher than 3 minutes should be avoided unless it is a small denomination card that is going to be used to make one phone call. Tel3Advantage is another way to avoid this and other hidden fees charged by most phone cards. They use a one minute rounding interval and do not charge for unanswered calls.

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