A beginner’s guide to choosing the right mobile phone plan

If you're feeling overwhelmed at the variety of mobile plan options and even just the terminology, our simple guide will ease you through the process of picking the perfect mobile plan for you.

couple_phone_shutterstock_738 If we put half as much time into choosing our mobile phone contract as we do picking out our mobile phones, we might end up saving a lot of money! But the truth is it can still be confusing to navigate the world of mobile phone plans and that means you can easily end up on a contract that isn't quite right for you.

Here are a few things to keep in mind when choosing a plan for your mobile phone.

Postpaid vs Prepaid

There are two distinct types of plans that mobile service providers offer and that's postpaid vs prepaid.

You might also see this as month-to-month vs contract or similar, but the essence is the same. They all offer data connectivity and voice and SMS, but with a few key differences, so let's review those now.

Postpaid: This is a standard monthly service contract. You usually sign up for 12 to 24 months and then pay a set amount each month. You're locked into that contract and are most likely up for an early exit fee if you split before the end. Payments are made at the end of the billing month or cycle, with a minimum flat fee for basic coverage plus any excess charges accrued.

It's these styles of plans that usually have the option to get a handset, often for an additional "handset repayment fee". That said, you might be able to get a $0 repayment on a quality handset, especially on the higher end plans in terms of how much you spend each month. You can compare postpaid contract plans here.

Vodafone changes the postpaid game
Vodafone has spun the pot a little when it comes to plans. Vodafone now offer all of its plan tiers as either pre- or postpaid. They've also separated the handset repayments from the plan contracts and these can be paid off over 12, 24 or 36 months. This makes it a lot clearer what you're paying for. It's all explained here.

However, postpaid is where you need to be a little more cautious about how much data you're using, because you'll see excess charges if you go over your allowance.

Prepaid: These are contract-free phone plans, where you pay upfront for an allotment of calls, SMS and data which you then use until it runs out or expires. The advantage here is being able to carefully manage your expenses. It also allows you to pick and choose what you need each month. Got a month coming where you know you'll need some extra mobile data? Just purchase more at the start because, unlike postpaid, you pay your full fee at the start of the month for a set quantity of usage.

Prepaid phone plans don't come with phones, although many budget handsets are sold as "prepaid phones". They're typically towards the cheaper end of the pricing scale, but there's nothing (beyond the contents of your wallet) stopping you from pairing a high-end handset to a cheap prepaid plan. Traditionally these plans were seen as second-tier and might have had poor allowances, especially on data. That's not so much the case these days, and you can find some very solid prepaid plans. You can compare Australian prepaid plans right here.

Think about what you need

Don't just choose a plan based on the price point. Have a look at what you're getting with a plan and how that fits with what you use. If you're only paying $40 a month on a postpaid plan, but consistently getting additional charges for, say, international calls, you're probably on a plan with the wrong inclusions for your needs.

Look carefully at how you use your phone before going in. If you're constantly on a call, maybe look for something with unlimited calls. If you like to watch video on your smartphone, consider something with a little more data. If you're in the dark as to how much data you really need, read our guide to the data usage of most common smartphone activities.

Look at the total cost

A postpaid plan will always show you the minimum total cost over of the length of the contract and this number is important. For a start, it's the total minimum cost, so make sure you remember that. Secondly, it's a going to include all the additional monthly costs that might be tacked on after you sign up for what's called a $30 plan, for example.

Data is king

This isn't true for everyone, but for most users, you need more data than your plan offers. How do we know this? Because Australians spent $259 million on excess data charges in 2017. One in five people blow through their data cap. So think carefully about what you use and need before you commit.

Compare your options carefully

Keen to see what you can get with a bundled phone, on a prepaid plan, or whether you're better off buying outright? Our Mobile Plan Finder can help you make the right decision, with every handset and Australian carrier plan listed.

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