Calling Card Billing Increments

How Billing Increments Work

To figure out what to charge you for each call, your calling card vendor uses your actual talk time in combination with the card's billing increment to calculate billed time. Billed time is the actual number of minutes and/or seconds you will be charged.

Calling card companies calculate billed time roughly as follows:

'Roundup' means to round up to the next largest whole number. So, 3.2 rounds up to 4.0. 6.7 rounds up to 7.0. Etc.

The impact of billing increments is that even if you use just 1 second into the next billing increment, you get charged for the whole increment - even if that increment is 3-minutes.

Note, this isn't as bad as it may sound since most of the time you don't run over by a single second, plus lower billing rates for longer increment cards generally more than offset the less accurate metering.

So let's look at some examples as shown in the table below. In the table, the actual talk time is shown in black and the billed time is shown in red for various lengths of billing increment.

Total billed time is shown in red.

Let's walk through the examples in the second row where you make a phone call that lasts 9 minutes and 31 seconds (9:31). And let's start first with the rightmost column for a card with a 3-minute billing increment.

For a card with a 3-minute billing increment, the company first divides your 9:31 call by the 3:00 minutes billing increment. That equals 3.51.

Next, the company rounds 3.51 up to the next largest whole number - i.e., 4.0. Meaning you are going to be charged for 4 billing increments. So, 4 billing increments x 3-minutes per increment = 12 minutes.

So, you get charged for 12 minutes of billed time vs. your actual talk time of 9:31.

If for the same length call of 9:31 minutes, you had a 1-minute card instead of a 3-minute card, then you would be billed for 10 1-minute billing increments - or 10 minutes.

If you made the same call using a card with a 6-second billing increment, then you would be charged for 60 increments - or 9:36 minutes.

Not shown in the table, but the only case where you'd be charged for your exact talk time of 9:31 is if you had a card with a 1-second billing increment.

Please note that appealing though this last example may be to be charged only for your exact talk time, it rarely, if ever, results in a lower total call cost. The reason for this is that companies normally charge much higher rates for cards with shorter billing increments. These higher rates more than offset any potential savings from more accurate metering.

Billing Increment Rules of Thumb

Billing increments and per minute billing rates interact in complicated ways that make it almost impossible to eyeball what card is going to be cheapest in a given situation. That said, we have a pretty rigorous calling card pricing model in-house and we have used that to test many different types of scenarios.

The result of our analysis is a few simple rules of thumb:

• Always buy calling cards with 1-minute or 3-minute billing increments because they generally offer the best calling card value.
• Choose a 1-minute billing increment if your average call length is less than 12 minutes
• Choose a 3-minute billing increment if your calls are more than 12 minutes
• Never buy calling cards with 1-second or 6-second billing increments because the higher per minute rates these cards charge are almost always offset by the benefits of more accurate call metering.

That's still not the simplest rule ever, but at least it let's you immediately eliminate 1-second and 6-second cards from consideration.

Click here for more details on why you should only buy 1-minute or 3-minute calling cards.

How Billing Increments Work

To figure out what to charge you for each call, your calling card vendor uses your actual talk time in combination with the card's billing increment to calculate billed time. Billed time is the actual number of minutes and/or seconds you will be charged.

Calling card companies calculate billed time roughly as follows:

'Roundup' means to round up to the next largest whole number. So, 3.2 rounds up to 4.0. 6.7 rounds up to 7.0. Etc.

The impact of billing increments is that even if you use just 1 second into the next billing increment, you get charged for the whole increment - even if that increment is 3-minutes.

Note, this isn't as bad as it may sound since most of the time you don't run over by a single second, plus lower billing rates for longer increment cards generally more than offset the less accurate metering.

So let's look at some examples as shown in the table below. In the table, the actual talk time is shown in black and the billed time is shown in red for various lengths of billing increment.

Total billed time is shown in red.

Let's walk through the examples in the second row where you make a phone call that lasts 9 minutes and 31 seconds (9:31). And let's start first with the rightmost column for a card with a 3-minute billing increment.

For a card with a 3-minute billing increment, the company first divides your 9:31 call by the 3:00 minutes billing increment. That equals 3.51.

Next, the company rounds 3.51 up to the next largest whole number - i.e., 4.0. Meaning you are going to be charged for 4 billing increments. So, 4 billing increments x 3-minutes per increment = 12 minutes.

So, you get charged for 12 minutes of billed time vs. your actual talk time of 9:31.

If for the same length call of 9:31 minutes, you had a 1-minute card instead of a 3-minute card, then you would be billed for 10 1-minute billing increments - or 10 minutes.

If you made the same call using a card with a 6-second billing increment, then you would be charged for 60 increments - or 9:36 minutes.

Not shown in the table, but the only case where you'd be charged for your exact talk time of 9:31 is if you had a card with a 1-second billing increment.

Please note that appealing though this last example may be to be charged only for your exact talk time, it rarely, if ever, results in a lower total call cost. The reason for this is that companies normally charge much higher rates for cards with shorter billing increments. These higher rates more than offset any potential savings from more accurate metering.

Billing Increment Rules of Thumb

Billing increments and per minute billing rates interact in complicated ways that make it almost impossible to eyeball what card is going to be cheapest in a given situation. That said, we have a pretty rigorous calling card pricing model in-house and we have used that to test many different types of scenarios.

The result of our analysis is a few simple rules of thumb:

• Always buy calling cards with 1-minute or 3-minute billing increments because they generally offer the best calling card value.
• Choose a 1-minute billing increment if your average call length is less than 12 minutes
• Choose a 3-minute billing increment if your calls are more than 12 minutes
• Never buy calling cards with 1-second or 6-second billing increments because the higher per minute rates these cards charge are almost always offset by the benefits of more accurate call metering.

That's still not the simplest rule ever, but at least it let's you immediately eliminate 1-second and 6-second cards from consideration.

Click here for more details on why you should only buy 1-minute or 3-minute calling cards.