Save Money Calling Home From Overseas

By now, most of you have settled on your wireless phone as the best way to keep in touch with family, work and others at home while you're traveling around the U.S., Canada or nearby areas. Your phone works everywhere, and rates are reasonable. Overseas, however, you face significantly higher prices unless you make special arrangements. A reader recently asked:

"Is there anything new in calling home from overseas?"

The short answer is yes. Here's my latest update. Because it's the most important remote overseas destination, I focus on Europe, but the same principles apply to Asia, Africa or the South Pacific.

Why Not Just Call From Your Hotel?

Unless you haven't ever visited Europe, you already know the answer: Hotels there routinely gouge you for making international calls from your room phone. The last time I ran a test—several years ago—a three-minute call home from a London hotel room cost more than $15, and I suspect that's more now. Many hotels even charge for incoming international calls, and my experience has been that the more upscale the hotel, the bigger the gouge.

Obviously, sensible travelers don't use hotel room phones. And fortunately, you have lots of options to avoid the gouge.

VOIP—Cheap but Limited

Making international VOIP (voice over Internet protocol) calls with MagicJack, Skype, or a similar system is the cheapest way you can call from just about anywhere to just about anywhere else. The Internet doesn't care where you are; anyone you can call at no charge from home, you can also call at no charge from overseas. Specifically, you can use Skype or MagicJack whenever you have access to an online computer, either through a hotel's business center or at a Wi-Fi hotspot with your own laptop or notebook computer. And you can receive calls on the same basis. These VOIP systems, however, are more limited than conventional wire-based systems:

  • You need to take some sort of handset or headset with you.

  • Both you and the person you're calling have to be online to complete a call.

  • You may have to pay an extra fee to use a Wi-Fi hotspot.

  • With Skype, you have to pay extra to reach landline numbers, and you can't reach them at all with MagicJack. Verizon has recently cut a deal to use Skype with Verizon phones, but for calls originating overseas, local roaming rates apply.

Local SIM Cards

Installing local SIM cards for your regular GSM wireless phone has been the No. 1 recommendation for low-cost international calls for several years. It's still very inexpensive, and considerably more flexible than any VOIP system:

  • If your itinerary confines you to just one country, a SIM card for that country may offer the very lowest cost. In most of the world, you pay nothing at all for incoming calls or text messages, and your outgoing rates back to the U.S. can be as low as 8 cents a minute from the U.K., 30 cents a minute from France and 40 cents a minute from Germany. Intra-country rates are also low, but calls to other European countries are charged at higher "roaming" rates.

  • For a multi-country itinerary, you might be better off with one card that covers all or most of Europe. On some cards, rates are as low as 35 cents for the connection plus 50 cents a minute.

Each local SIM card has its own local number. People calling you from home pay the international rate, but most U.S. phone systems now offer reasonably low international calling rates.

To use your own wireless phone in Europe (and much of the rest of the world), you must have a three- or four-band GSM phone. Until recently, Sprint Nextel or Verizon users couldn't use this technique, because those systems use the CDMA mobile phone standard rather than GSM. However, GSM has something like an 80 percent share of the world market, and both Sprint/Nextel and Verizon have started to sell "global ready" smart phones that can use GSM. Chances are that if you've recently upgraded to a BlackBerry or some other high-tech wireless phone, it's global ready.

You can buy overseas SIM cards from several outfits in the U.S., often bundled with 10 minutes or so of time, for prices starting at around $25. You can change however many additional minutes you need online with your credit card. You can buy single-country or multi-country SIM cards from outfits such as Telestial, Planet Omni, SimphoneE, and US Tronics. These agencies also provide rental and one-use phones. And for lots more detail on overseas wireless phones, log onto The Travel Insider and Global Phone Wiz.

One final step: The software in some GSM phones locks you into using only the original SIM card. To use lower-cost local SIM cards you must first "unlock" your phone. In most good size cities, you'll find local wireless phone stores that will do this for you, for a fee—but ask an independent store, not a company outlet. Alternatively, several online outfits sell unlocking services—some have you ship them your phone, others say you just have to download a program.

Callback

Several outfits provide callback service that you can use from either a landline or wireless phone. You dial an access number, let it ring a few times, then hang up, and an automated switchboard calls you back with a U.S. dial tone. You then make your call as if it were domestic. Costs are low because all you pay is the low outgoing international rate from the U.S.

Some callback systems claim they can even work through a hotel switchboard, but I've never heard from anybody who did this successfully. Post a comment on your experiences.

Roam With your Regular Phone

All the big U.S. wireless phone companies allow you to use your regular GSM phone overseas. You keep your regular number and use your phone as you would at home. However, international roaming rates can be stiff. Normally, you pay something like $1.25 a minute for both incoming and outgoing calls—which you can cut back to about $1 if you sign up for an extra-fee international service. With this approach, you don't have to do much of anything in advance—just take your phone and go.

I recommend roaming with your regular phone only if you expect to make or receive only a few calls during your trip. Then, the hassle of unlocking your phone and buying new SIM cards for $25 or more probably isn't worth any cost advantage you might enjoy. But for most travelers, new SIM cards are the way to go.

Calling Cards

Calling cards work the same way overseas as they do at home. You buy a card with a certain stored value, which you can replenish online or through some other system. To make a call, you use a local landline, enter a local access number, punch in some sort of ID or user code, then the number you want to call. The system deducts charges for each call from your stored total.

Your regular phone company probably offers such an international calling card. With the AT&T Direct Savings Plan calling card, for example, you pay 89 cents for a connection plus 99 cents a minute for calls to the U.S. from 140 countries around the world. Other local landline suppliers offer similar plans.

Third-party or local company cards, however, are usually much less expensive. For example, the World Access card charges just 3 cents a minute for calls from France to the U.S., with no connection fee.

But actual calling card costs are usually higher. Hotels almost always charge you for making even a local or toll free call from your room—fees that can be as high as $2 per call at upscale hotels, and some of them add a per-minute charge, as well. Getting a connection through a public phone can also entail a connection fee, and, even then, public phones are getting harder to find as more of the world switches to wireless. Still, if you don't mind the hassles of getting a connection and all the extra numerical entries, a cheap calling card may well be the very lowest way to call home.

Ed Perkins is a contributing editor to SmarterTravel and a respected commentator on all aspects of the travel industry, including passenger comfort and rights, travel insurance, the best credit cards for travelers, and car rental fees. SmarterTravel provides expert, unbiased information on timely travel deals, the best value destinations, and money-saving travel tips.

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