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Mobile phone bills that bite
By Tammy Barton

Mobile phones young peopleIn the context of the ongoing Vodafone shambles, I thought it was a fitting time to talk about mobile telephone bills. We see a lot of people at MyBudget, especially young people, whose finances have been hurt by mobile telephone bills and contracts.

Many people assume that their credit rating is more likely to be affected by defaults on “serious” bills, such as mortgage instalments and credit card repayments. They don’t realise that missing payments on smaller bills can also attract default listings and affect their credit rating for up to five years.

A bad situation can also snowball. We see people, for example, who’ve missed a number of payments and had their mobile phone disconnected, yet they’re still liable to pay for the remaining contract.

Long-term contracts and capped plans can look attractive, but they may not be right for you. Before committing to a mobile phone contract, work out how the payments will affect your budget. If your income goes down for a reason (eg. reduced hours, job loss, return to full-time study), will you be able to keep meeting the commitment?

A pre-paid plan may be a better option if you experience low or fluctuating income, poor job stability, or you have a history of overspending or not keeping track of your expenses. Recognising these factors and planning for them is one of the first step to taking control of your finances!

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