Tariffs simplified

A tariff is the amount of money you regularly pay for your mobile phone. This can either be a pay monthly contract or a pay as you go deal.

There are many types of tariffs available depending on how you use your mobile.

With a pay monthly plan, you commit to making monthly payments for 12 or 18 months. Your payments get you a call allowance, usually measured in minutes, and some other services. Frequent callers do best, because you get more minutes per pound on the more expensive pay monthly contracts.

Check the fine print carefully, since different networks have different inclusions and exclusions. For example, some plans give you a monthly allowance of text messages, while others charge for them separately. You'll also be charged extra if you go over your allowance.

3G charges are often complicated, with inclusive minutes, inclusive megabytes of data, inclusive minutes of video calling and inclusive downloads. Many items also attract fixed costs. For example, music and video downloads are typically around £1.50 each.

Pay monthly contracts have two main advantages: you can choose from a wide range of phones, often at highly subsidised prices, and you get access to more services.

Find out more about pay monthly contracts.

The immensely popular pay as you go plans, also known as pre-pay plans, are much easier to understand. You pay for the handset upfront and have no long term contract to worry about.

When you want to use the phone, you purchase credit from your network, in the form of a 'top-up' voucher. You can make calls, send text messages and so on until your credit runs out, whereupon you top up your credit by purchasing another voucher.

Some networks require that you make at least one call every few months, whereas some just require that you keep your account in credit.

The advantage of pay as you go is that you can't run up a ridiculous bill, because you pay for everything in advance. You don't need a good credit rating or proof of address, because there's no contract to sign. However, you'll pay more for your phone and you'll have fewer phones to choose from.

If you make a lot of calls, you'll end up spending more than you would with a pay monthly contract, because call charges are higher.

Did you know that:

• calls to so-called freefone numbers (e.g. 0800 numbers) are often chargeable at a standard national rate when you call from a mobile
• calls to numbers beginning 09 are always for premium rate services – calling these numbers from a mobile will usually cost even more than the advertised rate
• some companies will charge for sending you itemised bills
• while weekday ‘peak periods’ usually run between 7am and 7pm or thereabouts, the exact times often vary from network to network
• calls to other mobile networks are expensive if not included in your pay monthly tariff