Student Guide: Mobile phones

Information verified correct on October 27th, 2016

Knowing what's available on the market with mobile phones will help you make the right choice.

When you become an adult, it's time to pay your own way with the money you will be earning. Since everyone needs a phone, you should make sure your not paying too much for your mobile phone each month. The two main options are prepaid and postpaid (also know as simply being 'on a plan') and getting familiar with how each works can make a big difference.

Interesting points about Mobile phones

Prepaid mobile phones

A prepaid phone offers numerous advantages and is an excellent option when you first start working because it will let you work out exactly how much you use every month. This will make it easier for you to pick the right plan later on without paying a fortune in excess costs.

With a prepaid phone you can also change handsets more often, since a plan usually involves purchasing a handset on contract, which means that you will be stuck with the same phone for two years. By prepaying for your phone costs, you will also be able to stick to a budget, which means you will only be able to use what you can afford and can't run up additional costs. You also don't have to sign up for a contract and be stuck paying a monthly fee.

getting a pre-paid mobile

The fact is that a prepaid phone is generally more expensive than a plan, for calls, texts and more. However, at the beginning, it's definitely a better option as you won't have to cough up money every month.

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Mobile phones on a plan

Mobile phone plans are everywhere today. Each provider is vying for your business, so there's a huge amount of plans available and the type you choose will depend on how much you can afford and how much you use every month.

This is important because you will have to pay penalties if you are late paying your bill and it will affect your credit, which will make it harder for you to get a loan in the future.

getting a post-paid mobile service

If you discover that you can't afford to pay for your plan after signing the contract, you will have to pay in full for the handset, if you purchased it with the plan and also pay early termination fees or exit fees to cancel the contract, which can amount to a lot. This is why it's so important for you get the right plan from the start and budget accordingly.

In terms of the types of plan available, you can opt for a SIM-only contract or one with a phone. You can also have an internet connection added to your phone, with either 3G or 4G speeds and 'unlimited' plans which offer an unlimited amount of calls, messages and data per month. Let's look at each.

  • Sim-only contract

    A SIM-only contract is designed for those who already have a phone or wish to purchase one outright. In this case you'll only receive the plan and will use your existing phone. These are cheaper than plans which come with a phone.

  • Contract with a handset

    A contract with a handset is one where you purchase the phone from the carrier and pay in instalments each month, which means you will be generally locked into a contract between 12 to 24 months.

  • 3G/4G data plan

    A 3G/4G plan will allow you to access the internet wherever you are and is ideal for smart phones and other types of mobile devices which can access the internet.

    3G stands for Third Generation and refers to a specific transfer rate when surfing the web (200kbit/s for the technology connoisseurs out there). 4G stands for Fourth Generation and provides much faster internet, but requires a phone which can support 4G connections and a mobile network which offers it.

  • Unlimited plan

    As the name suggests this offers unlimited calls, texts and usually a high data allowance. These can come as a sim card-only contract, with a phone and with 3G or 4G data. These plans tend to be quite expensive, especially when combined with a phone, so make sure you'll use the allowance up.

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Shirley Liu

Shirley is finder.com.au's publisher for banking and investments. She is currently studying a Masters in Commerce (Finance) and is the author of hundreds of articles. She is passionate about helping Aussies make an informed decision, save money and find the best deal for their needs.

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