Cut the cost of calling abroad this Xmas

We investigate how you can make the cheapest calls to friends and family abroad this Christmas.

Christmas is a time for reconnecting with friends and family overseas - with 40% of us calling abroad on Christmas day, according to Which? But paying £1 a minute for hurried, crackly phone calls can leave you feeling distinctly un-festive.

So the good news this Yuletide is that making totally free calls from your PC has never been easier, using Skype and other VoIP software.

And you don't need to ask the person at the other end to install special software. In fact, if you don't mind paying a few pence per minute, Uncle Dave in Spain won't even know you're using Skype - and it's still far cheaper than BT!

Yet Skype isn't even the cheapest way to make landline calls. If you're organized and prepared to experiment a bit, there are even cheaper providers out there.

So now is the time to get your overseas phone arrangements sorted now for Christmas - and make the cost of getting connected one less thing to worry about on the day itself.

Skype - believe the hype

I'll admit that, even as a geek, I hadn't got to grips with Skype until recently, even though I knew that Skype-to-Skype calls were free, and everyone said it was easy.

Somehow it just always seemed like too much hassle. I'd have to buy a special headset... and then yell into a microphone... and the call quality wouldn't be any good, would it?

How wrong I was. Mocked by a friend, I borrowed a headset and gave it a shot - and now I'm a total convert. Not only is Skype easy to use (and the headset, while not exactly flattering, really isn't that bad). But in some respects it actually beats ordinary phone calls.

Firstly, video calling. If your computer has a webcam (lots of laptops have them inbuilt these days) then you should be able to make video calls easily. Perfect for waving to friends and family across the world on Christmas day.

Secondly, call quality. In general, this is often better than a mobile signal. It's only poor if the internet connection is bad.

And last - did I mention that it's free to call other people with Skype installed?

All you need to get started is:

• A computer and an internet connection (since you're reading this, it's probably safe to assume you have these already)
• The free Skype software installed on your computer
• A headset with a microphone - these start at 1p on Amazon!

Installation is easy, but if you get stuck, check out these instructions.

Calling landlines and mobiles

All very well, you may say, but what if the person you're calling at Christmas doesn't have Skype? After all, it's not reasonable to expect elderly relatives, particularly if you only speak to them once a year, to get to grips with software just for you.

But fear not - you can call ordinary lines too, direct from the Skype software, by buying pre-paid credit. The person at the other end won't even know that you're calling from Skype!

Skype's pay as you go landline rates are decent (though not the best around) and convenient if you already have Skype. For example, calling landlines in the US is 1.4p/min anytime with Skype, whereas BT's standard daytime rate is 17p/min. 

But if you're planning to make lots and lots of calls overseas, check out Skype's unlimited accounts: £4.54 per month for unlimited calls to landlines anywhere in Europe, or £7.99 for unlimited calls to landlines in over 40 countries around the world. These rates are hard to beat if you're a regular foreign caller.

And with Skype To Go, free with the account service, you can call abroad from your mobile or any other phone at the same rate as from your computer. No additional software is needed - you just pre-dial a special number first, which is hard to beat for convenience.

Even cheaper

Skype's pay-as-you-go rates aren't actually the cheapest around - they use these rates to subsidise the rest of their service. If you're keen to get the cheapest deal, it's worth checking out a few other services.

There are a million third-party discount foreign call companies, with a bewildering array of offers to each country in the world. Use Google to find the companies offering the very cheapest foreign calls to any country from your own landline.

A couple of services offer totally free calls, though it can be a bit fiddly to work these out. Website jajah.com lets you call phones in most of Europe and America for free. You don't even need to use the web - just go to the homepage and enter the numbers you want to call. Your home phone rings, and then calls the number abroad. Like Skype, the service uses the internet to route most of its calls, keeping prices low.

And Rebtel offers free international calls from mobiles - you just pay the local part of the call, so if you have a mobile with free minutes on a calling plan it costs you nothing.

In a few years, everything could have changed. Google (which has a habit of transforming any market it enters) has just started to move into the voice market, with Google Voice.

The Google Voice service offers as well as low-cost international calls, offers free SMS, voicemail transcription, and a single number for all your calls. Unfortunately, it's currently only available in the US, but it should be coming to the UK soon.

So in the near future, the cost of foreign calls could drop to almost nothing. In the meantime, keep your calls cheap, and Christmas cheery!

Get help from lovemoney.com

If you need help cutting the cost of your phone calls first, try our Spend less on your mobile goal.

Then check out Q and A where you can ask other lovemoney.com members for hints and tips about what worked best for them.

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