Mobile phone providers have come up with nifty ways to not only dominate our free time – with addictive-services like texting, downloading ringtones to video messaging – but also charging us for the privilege.

You text (SMS) your partner about dinner arrangements five times in an afternoon at 30 cents a pop, you check your voice messages three times at 75 cents each, you use your mobile’s multi-messaging service (MMS) to shoot through a couple of photos of your new house to your three mates at 60 cents each time – and you’re already up to $5.50 for the afternoon’s activities. And this doesn’t even take into account any phone calls made, payments for your handset and other features such as downloading ring tones and so on.

Nifty features come at a cost, and the more nifty features you use on your phone – the bigger your bill will be at the end of the month.

Try not to venture into a mobile phone retail outlet without doing your homework first. You should be familiar with the range of options available, the costs and features of various plans, and the category of mobile user you fit into.

Do you mainly use your phone for retrieving phone calls, or do you like to make calls to friends, work colleagues and family? And are those phone calls generally of a short or longer duration? And what time of day?

These are the types of questions worth asking in order to determine the best plan for you. Frequent travellers, business people and those living in rural areas clearly have other needs that should be taken into consideration when choosing a mobile plan.

Before taking a look at the various options available for mobile phone users, here are a couple of pointers for reducing the cost of your mobile phone habit.

Ask your friends and family what carrier they use, and think about using the same one. Increasingly, carriers offer free chats on the same network, which means that you can chat to your friends and family for as long as you like at no cost.

If you don’t use your phone all that much, think about getting a pre-paid plan that means you only pay for the phone calls that you make, and not those that you don’t. There’s no point forking out $30 a month on a monthly plan if you make $10 worth of calls.

If you tend to make your phone calls at a particular time of the day – say early evening, on the weekends, or peak hour – look for a carrier that offers the cheapest rates over those key periods.

What’s on offer

The range of mobile phone options on the market range from pre-paid cards – giving you complete control over your mobile phone outgoings – to 12 month and 24-month plans (that wrap a certain number of phone and SMS messaging costs up into a monthly fee), to capped plans, month-by-month plans and more. It sounds complicated, but to make life easier we’ve firstly outlined the personality type suitable for each category before discussing the pros and cons of each option.

Pre-paid cards (pay as you go)

These cards are suitable for the cash-strapped, children, those who need limits over usage or want complete control over how much they spend, as well as anyone who doesn’t intend to use their mobile phone all that much. These cards are not suitable for frequent mobile phone users or anyone requiring a mobile phone handset.

Pre-paid cards can be purchased from a newsagent or mobile retail outlet – costing anywhere from $10 to $100, and lasting between one month to a year. When a pre-paid card expires, any unused credits go to waste. So if you buy a $30 pre-paid card with an expiry of 2 months, and you forget to use it – you’ve lost $30 in phone calls at the end of the 2-month period. Therefore, phones with a longer expiry date are usually a better bet.

Once you’ve used up your credit, most pre-paid cards continue to let you receive calls, but not make them – except to emergency numbers 000 and the pre-paid service number to add more credits to your account.

The good news is that pre-paid cards require no credit checks, no monthly contract, and you only pay for what you need. Unlike being on a monthly contract or package, you won’t receive a bill from the mobile phone company involving hundreds of dollars worth of mobile phone charges that you’ve inadvertently made.

It is important to be aware that call charges on pre-paid phones are often higher than call charges on a plan, so if you are a frequent phone user – you’d probably be better off on a monthly plan. It’s worthwhile comparing the call costs between prepaid cards before you buy. Telstra Mobile, Virgin Mobile, Vodafone, Optus and Savvytel offer pre-paid charge cards.

Monthly plans (no fixed-term contract)

Month-by-month plans are suitable for those who want the flexibility to be able to change mobile phone providers or plans at a whim, that don’t need a handset and don’t like being locked into a contract.

The only real difference between a monthly plan and a prepaid card is that on a monthly plan you are charged for how much you use – which could be higher than you originally estimated come bill time. Pre-paid cards, on the other hand, are paid up in advance – so once you’ve exhausted your credit, that’s it – no more calls can be made until you top up your account. Pre-paid cards are therefore a better option for the money conscious.

The good news is that many providers offer “capped monthly plans” – a handy option for frequent users wanting to avoid a mobile phone bill blowout. It’s worth remembering that, in most cases, the higher the monthly access cost, the lower individual call costs will be. Since most of us tend to make more phone calls than we realise, it’s probably wise to pay slightly more in monthly access charges than we think necessary.

Call rates on a monthly plan are typically the same as fixed-term contracts.

Fixed-term contracts (plans)

Suitable for regular to frequent mobile phone users, those wanting a handset, or anyone who is organised enough to know exactly what they want. Fixed-term contracts aren’t suitable for those who hate being locked into a contract, wouldn’t pass a credit check, or can’t afford the monthly subscription fee.

Serious mobile phone users are clearly best placed on a fixed-term contract, offering the widest choice of services, free handsets and capped plans – some of which let you call and text as much as you like for a set monthly fee. The biggest downside of these contracts is deciding which one is the most suitable for you. Call charges are typically lower than prepaid cards.

The contract period is usually 12 to 18 months, and you are billed on a monthly subscription basis with a certain amount of call costs, SMS texting and the like thrown in with your monthly subscription. If you go over your monthly allowance for phone calls and so on, you must fork out the difference. The difference can be hefty, particularly if you’ve under-estimated the amount of calls you make.

Most people include a handset with their package, and pay it off over the contract period. When mobile phone providers talk about throwing in a handset for free, don’t believe a word of it; you basically pay off the handset over the contract period in set monthly payments. Indeed, nothing in life is free.

Here are a couple of pointers for comparing the different call rates and fees between different plans:

Call Charges – calls can be charged per second, per block of time or capped, meaning you pay a maximum amount per month regardless of how few or many phone calls you make. Texting, mobile messaging – sending photos, videos and so on – have separate charges.

Flag fall – this is the flat fee charged every time a phone call is made, charged by some (not all) mobile phone companies, and can be in addition to call costs.

Specials – mobile phone providers are forever advertising new-beaut specials, so keep a look out. Particular specials worth noting are cheaper or free calls and SMS text messaging to friends and family on the same network, and cheaper off-peak calls.