Steadfast FinancesGiving 'MagicJack' a Honest Try

Giving ‘MagicJack’ a Honest Try

Filed in Bargain Hunting , Frugal Living , Saving Money 21 comments


If you’ve been following the SF blog for a while, you’ll know that I’ve been on something of a cost cutting binge in order to excise as many cash flow leeches from my wallet as I possibly can.

This has been accomplished with some very easy frugal lifestyle substitutions and a few lesser known money hacks to reduce my consumerism without sacrificing quality or increasing my workload beyond noticeable levels.

Basically, it’s a self-imposed audit and continuing improvement plan to cut the fat out of my budget. So every month, I eliminate one unnecessary expense, overpriced service, or outdated technology. And let me tell ya… no brand is safe!

This month, my cost cutting crosshairs fell upon my old friend Vonage.

Switching from Vonage to MagicJack

I’ve had a Vonage account for several years now. Since I’ve always had high speed internet service, Vonage always seemed like the logical choice since their service was more cost effective than bundling my home phone service with my cable TV/internet provider or going old school with a traditional landline from a Baby Bell like AT&T or Verizon.

So Vonage and I are a perfect match for life. Right?

In 2004… yes.

At the end of 2009… not so much.

Unfortunately for Vonage and the rest of the VoIP telephony providers, they’re using early 2000s VoIP technology and haven’t felt enough pressure (yet!) to lower their prices to rival their competition.

Since they refuse to change, I suppose it’s time to make a switch to this cool little gadget called MagicJack that will supposedly lower my monthly home telephone costs to $20 per year versus Vonage costing me around $300 per year.

Giving Magic Jack a Fair and Unbiased Try

I like to think I’m open minded enough to give any new technology a try without allowing my technophobic tendencies to cloud my judgment, and considering the potential savings of $280 per year, I decided to give this little MagicJack gadget a try.

I read the both the positive and negative reviews (no confirmation bias here), and I came to the conclusion that most of the people saying “MagicJack is a scam” are probably the same people who have a difficult time installing a new printer or using their DVR.

(Time will tell if my assumption was wrong because I’ve only had the gadget for 3 days!)

So I purchased the Magic Jack USB unit online for $39.95 plus $6.95 for shipping and handling, and it arrived around one week later.

What Installation Problems?

Installation couldn’t have been simpler and took me around 15 minutes on my old Compaq laptop running Windows XP. All I did was plug the Magic Jack USB device into an open USB port, connect a cordless telephone, and it automatically did the rest.

Once it finished doing the self-install, I had to choose my new phone number. I had the option of taking a free random number from Magic Jack or pay $10 for a vanity number. Contrary to being the constant Mr. Cheapo, I chose to buy a vanity number. (Hey sue me – I may be cheap, but I still have a small vanity problem!)

After this, all I had left to do was setup my local 911 service, create my voicemail account, and cycle through half a dozen upsell choices for additional services (not fun).

Not exactly rocket science here, so not sure what all the fuss is about with MagicJack being difficult to install. Maybe it’s because it’s Windows XP instead of Vista, or I actually took the time to read the directions.

My Short Term Review

I’ve used the new Magic Jack telephone service a few times over the last 3 days, and I can’t detect a single difference from Vonage, a traditional landline, or any other mobile phone. All in all, it works perfectly fine and I’m happy with the service it will provide for the next 12 months at a cost savings of $243.10.

$300 – ($39.95 + $6.95 + $10.00) = $243.10

$Vonage – (USB Device & 1st year service + S&H + Vanity Number) = 1st year savings

Yes, MagicJack does have some limitations. If my internet service provider has a service interruption, I’m without a working home telephone. But the same problem presents itself with Vonage, so I’m gaining nor losing any added security.

With the added transportability of throwing the USB device in my laptop bag and the money I’m saving, I could care less if it’s 100% foolproof. I also lose the ability to call India, Brazil and Europe for free, but gee whiz, it’s not like I do that on a regular basis.

I could have also continued using Skype free of charge, and I’m sure I will because of the point and click convenience factor or the rare occasion when one of my friends wants in on the free video conferencing feature (Google Chat via Google Mail also provides this free of charge). The only problem with Skype is that it’s only free between Skype user to Skype user calls, and I really can’t see trying to convince my family members to chill out in front of the PC while they talk to me. The technology just isn’t mainstream enough for those who aren’t computer friendly or enjoy sitting at their PC for an entire telephone/VoIP call. So for now, Magic Jack just seems to fit my needs a little better than Skype and internet based telephone alternatives.

If I like the MagicJack service enough to recommend it to others, I’ll probably buy 4 or 5 additional units and give them away as gifts to family members. Collectively, that’s probably $1000 to $2000 in annual savings alone.

I’ll write up an product review at the 3 month and 1 year mark to give updates on the quality of telephone calls and any other reliability issues surrounding the Magic Jack unit.

Have you tried MagicJack?

Got anything to say about it? Good, bad, or ugly… I’d like to hear your thoughts.

~ ~ ~

Disclosure: This is not a sponsored review. I am not receiving affiliate income or freebie products for posting a semi-positive review. Just a satisfied customer sharing a story about saving some dough.

Photo by freephotos70

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Posted by CJ   @   3 December 2009 21 comments
Tags : , , , ,


Dec 4, 2009
10:08 am

Getting a review from a “trusted” source goes a loooong way in convincing me of a product’s performance.

I probably wouldn’t have ever gone through with setting up such an unproven product, but after this, I think I will.

With my wife’s home business, though, I’ll have to make sure I can keep the same phone number…

I’ll let you know how it goes, SF.
Thanks again!
.-= andrewbpaterson´s last blog ..A EUREKA Moment while Bottle-Feeding! =-.

Dec 4, 2009
10:36 am
#2 Matt SF :

Thanks Andrew. I appreciate the comment.

This is my first product review so I wanted to give it my normal glass half empty, skeptical, finance oriented review. As much as I tried, I really can’t find a flaw with the MagicJack unit within the time I’ve had it.

I’m 99% certain that you can’t transfer your existing phone number. However, you have the option of creating a vanity number as I did, so perhaps, you can upgrade to a phone number that you would prefer to have.

Perhaps your wife’s name, business name, business initials, etc. are all good starting points. For $10, it’s a pretty cheap way to cash in on a clever marketing gimmick if you can make the digits and business name coincide.

Jun 30, 2010
12:48 am
#3 Anderson :

Porting of existing numbers is reported by Magic Jack to be available Aug 1st 2010.

Dec 4, 2009
10:28 pm
#4 FFB :

This may be just hearsay, but I’ve heard that MagicJack installs malware on your computer tracking what you do and what sites you see. Not sure if it’s true though (it could make some sense to make up for the low cost?).

Google Voice is another phone number option out there. You still need a provider but you can route all of your numbers through them. Still playing around with the features to see how useful it is. I like their SMS online. Sometimes I want to text with typing into the small keys on the phone so a computer option is nice. And it records and transcribes your voicemails and keeps your texts.
.-= FFB´s last blog ..It’s Official First Time Home Buyer Tax Credit Extended Now For Existing Owners Too =-.

Dec 4, 2009
11:48 pm
#5 Matt SF :

@ FFB,

Hmm, I read about something about malware to, but didn’t really find much supporting evidence. I do recall a legit sounding complaint that said “the MagicJack software was very difficult to remove” written by a guy who seemed to know what he was talking about, so it’s entirely possible it resembles malware if a standard Windows uninstall won’t work. Since I’m using it on an older backup laptop that is only being used for the MagicJack device, I’m not sure it can log what I’m reading or visiting.

I looked into Google Voice, but I really didn’t see much benefit in relation to the cost savings since you still need a telephone provider. I’m guessing it can save you money if you have a landline and still paying for “old fashioned long distance”, but other than that, didn’t see much reason to give it a plug.

I’ll have to keep an eye out for the malware. If you find anything further, I’d appreciate a heads up.

Dec 6, 2009
12:02 pm

Matt, great post – Glad you’re doing the review. I’ve been wanting to get one of these, but a friend of mine said it opens your computer up to others (kind of like a napster file sharing deal) and so the risk of getting hacked is huge.

Have you come across anything like that?
.-= Jason @ Redeeming Riches´s last blog ..Would You Rather Be Filthy Rich or Extremely Poor? =-.

Dec 6, 2009
12:17 pm
#7 Matt SF :

@ Jason,

That’s troubling if it true, so thank you for raising a most important question. I haven’t stumbled across anything to suggest MagicJack creates a window to be hacked, but in all honesty, I didn’t actively go searching for it either.

I searched Google with keyword combinations like…

“MagicJack + Scam”
“MagicJack + Malware”
“MagicJack + Shareware”
“MagicJack + reviews”
“MagicJack + awful (horrible, POS, etc)”

… and several more permutations, but I’m fairly certain I did not actively search for “MagicJack + Hackers”.

Now that my curiosity is awakened, could this open up the rest of the network (other laptops) to the same threat or would it be contained to one specific laptop?

I ask because the laptop I’m using with the USB device basically sits idle in hibernation, so I’m curious just how much damage could be caused if the threat is real.

Dec 7, 2009
5:46 am

I have used Magicjack for the last year and a half without problems. It works as the website indicates.
I am now in the five year plan. It’s great. You may have to wait for customer service, though.

Dec 7, 2009
11:13 am
#9 David :

Do you have to leave your computer on 24/7? I think I remember reading that, and I wouldn’t be willing to do that just to use the phone. Otherwise, it sounds like an amazing product for a great price.

Dec 7, 2009
11:52 am
#10 Matt SF :

@ David,

Yes, the PC/laptop does have to be on 24/7 for the device to work. As you know, I’m big into conserving energy, so I just power it down at night and if anyone calls, it goes to voicemail just like any other phone. Plus, it’s not like I’m the most social guy in the world, so I’m betting that over time, I’ll just power up the spare laptop whenever I need to make a call.

I’m not screening calls if I’m not accepting calls! haha!

I’ve also noticed that the device will still work if the old laptop is in hibernation mode. If I click on the talk button, it occasionally doesn’t give me a ring tone immediately, but if I hang up, and click talk again, I do get a dial tone. So I’m guessing hibernation mode isn’t impacted by having the MagicJack device installed into a USB port.

Definitely a few trade offs with this gadget, but I think the cost in telecom savings is worth the small bump in electrical usage. If you have vampire power numbers or carbon footprint data to suggest otherwise, I’d love to see it and use it in a future post.

Dec 7, 2009
11:36 am
#11 Matt SF :

@ Carlos,

Thanks for commenting, and I’m glad to hear you’re getting max value out of your purchase.

I was thinking about upgrading to the 5 year plan at a discounted price, but read somewhere that Magic Jack had some customer services issues in the accounting area. I’m trying to play it safe, so I didn’t want to give them an additional $70 without making sure I was completely satisfied with their product as a safety precaution.

If it works well for the next few months, I’ll probably step up and buy the extended service plan of 5 years. I think it was $70 or something.

Dec 7, 2009
12:05 pm
#12 David :

Interesting, might have to give it a shot when my current deal runs out. And will see if I can find any #’s :)

Jan 2, 2010
4:09 am
#13 Cody Bromley :

You’ve got me sold! I’ve been browsing for a few hours, and the whole time I’ve ALSO been thinking “I came to the conclusion that most of the people saying ‘MagicJack is a scam’ are probably the same people who have a difficult time installing a new printer or using their DVR.”

I’ll be setting up myself with a trial once I get back to school in Oklahoma City.

I’d like to see what you think a month later! You still have a week to convince me I shouldn’t do it.

Jan 2, 2010
8:33 am
#14 Matt SF :

Glad I could help out Cody. One month later, I’m still thinking MagicJack was a solid investment. I’ve haven’t had a Windows XP issue or had an issue with unreliability, so no major issues to report. Gets top marks as far as I’m concerned.

However, I did find out that MagicJack does keep track of the numbers you call, and will target their advertisements accordingly, so that treads upon the boundaries of malware. I’m one of those people who have become nearly immune to advertising, so this decision doesn’t affect my decision, although it does bring up an ethics argument.

Feb 1, 2010
11:30 pm

You’re absolutely right guys, the magicJack certainly is not a miracle device, but at the same time, it truly is offered at a somewhat miracle price. Especially when you compare to Vonage, the price is so much better, and the service is almost identical.

Feb 3, 2010
9:30 am
#16 Matt SF :

Exactly! I did a few rough estimates in my head when I saw the $20 per year commercial (starting after year #2), where I would pay my entire phone bill in one month versus the cost of Vonage for one year.

My parents still have a traditional landline through Verizon, and my annual phone bill with MagicJack equals about 2 weeks of their phone bill, so they’ll be getting a MagicJack unit fairly soon.

Have you seen the new cell phone based MagicJack unit that turns your home into a mini-Wireless tower? Instead of taking your wireless calls to the local tower, the USB device picks it up and routes them through the web.

Pretty cool since you don’t get hosed for minutes since it’s treated just like a regular VoIP call.

Sep 1, 2010
3:35 pm
#17 John Marlin :

It appears Magic Jack is the least expensive phone service option period. VoIP for under $2 a month with long distance. The traditional land line is almost dead. No wonder their stock (CALL) is way up ytd. Cell and Video Apps will get their share but the cheapest way to call right now is Magic Jack and the company is well run and the device works. The stock will go up.

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