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Today, carriers offer a number of alternative calling and data plans, making it easier to choose something that matches your lifestyle, business needs and cashflow.

Updated: 28 January 2012 - 13:57 GMT

Whichever you opt for, you are likely to use more talk time, texts and data than you expect. If you go over your limit, the cost will often be considerably more than if you chose a more generous calling plan in the first place.

There is a reason for this. The carriers are very crafty at devising plans such that no matter which you select, something will catch you out. For example, you may be within your calling minutes and free texts allowance, but did you send a lot of text messages of more than 160 characters? If so, you may be charged for extended text messages - worse, you may be charged for each group of 160 characters when each individual message consists of more than 160 characters! Likewise, you may be able to use your free minutes to call other mobile/cell phones - and even regular landlines, but if you call one of those pesky 08XX numbers (UK), that will be billed outside of your included minutes.

We recommending reading through this page, but for those in a hurry, avoid the false economy of lightweight plans:

Ideal if you have a predictable income, monthly contracts are now longer than they used to be. Although there are still some 12 month plans, 18 or 24 months are the norm today.

The key benefit to a monthly contract is spreading the cost of an expensive device. With some smart phones available for cash/unlocked for up to $700/£600/€700, unless you have the cash available, a contract is the best solution. The secondary benefit is more generous talk time and data plans. Unlimited text messages are fairly common now too. With services like WhatsApp Messenger (iOS, Android), BBM, iMessage* (iOS) and other free text instant messaging systems increasing in popularity, carriers have no choice but to make SMS competitive. *Note that iMessage from Apple integrates with SMS.

The disadvantage of a monthly contract is that if you are a gadget lover who likes to change your toys frequently, unless you can command a good used price, you will be stuck with your phone until you are due for an upgrade - often 3 months prior to the end of the contract. Another critical disadvantage is that if you suffer cash flow problems in the future and cannot make payments, your connection may be barred and your credit history effected. If you cancel your contract altogether prior to expiration, you will of course be made to pay a cancellation fee - after all, you are holding a very expensive device paid for by the carrier.

Desperate to cut your costs?

Most providers allow you to move to a cheaper calling plan - mid contract. However, this will normally be limited to a reduction of 20% or so of the total monthly amount.

If things are really desperate or you decide to emigrate, some carriers also allow you to transfer your contract to another individual.

PAYG is the most expensive voice and data option. It works like this:

Although you are not committed to a contract with PAYG, like those high interest rent to own services for white goods, when you compare the cost per minute or texts or data to a contract or sim only plan, the price difference is huge. The solution is to purchase value packs that include a certain number of minutes and texts for a fixed price. However, recently the (UK) networks have been crafty, and that is bad news for us: You are often required to use up the contents of your value pack within a month of purchase. Once the month is up, the pack expires, even if you have hardly used it. In the past, on some plans, minutes and texts would roll over to the next month.

Another issue with PAYG - check with your carrier for precise details - if you do not use your phone to make a call or send a text every so often (3 months or so), the number will expire.

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The best option, in particular if you fit into one or more of the following categories:

Sim only is a relatively new option from the UK networks, and used by some of us at FONEBOX.COM. Unlike a proper contract you do need to acquire your device seperately, the cost is not included in the airtime. It works like this:

Normally offered with tablets, netbooks and dongles (such as MiFi), a data only plan is a very economical alternative to a regular voice call plan if you do not talk much. Few if any carriers market their data plans to phone users, but there is no reason why you cannot put a data sim card into or request a data only plan for your phone if you prefer a device that is smaller than a tablet or netbook. Although you won't be able to make regular calls or (in most cases) sent text messages, you will be able to make VoIP calls from services like Skype or Google's Gtalk. Just ensure you have a good signal, else your VoIP call may be of poor quality or be dropped mid conversation.

Don't forget, as per talking plans, decide whether you want a contract or sim only data plan. As of January 2012, FONEBOX.COM is not aware of any Pay As You Go data plans.

Now you are armed with tips to help you choose a device, carrier and plan, return to the FONEBOX.COM checklist for the final steps.