09.Mobile phones and youth debt
Mobile phones have been identified as a major reason for youth debt — although more often than not it’s parents or other guarantors who get lumped with a ginormous bill. The high cost of SMS is a big part of the problem in this age group. It’s not unusual for teenagers to send hundreds of SMS each month — sometimes having protracted ‘conversations’ — and it all adds up.
SMS seems cheap, at only 25 cents per message or even less. However, costs in other countries are less than half this, and considering an SMS only uses a second or so of airtime, the rate here is vastly overpriced.
Then there are premium-rate SMS services (typically 55 cents per message), which people are encouraged to use for voting on reality TV shows and to enter competitions. The growing appeal of MMS (sending pictures, video, etc), which is usually more expensive than SMS, will further challenge tight budgets.
Another concern for young users is the emergence of m-commerce: you use your mobile phone as a de facto charge card for goods and services, and pay when you get your phone bill. Like SMS, the amounts each time might be trivial (a couple of dollars for a soft drink or parking meter payment), but it can amount to a lot at the end of the month.
Pre-paid to reduce debt
The best way of avoiding debt problems is to get a prepaid service. Then you only spend when you’ve got money, and if you’ve run out you can still use the phone for genuine emergencies (000 calls) and to receive calls.
Be careful using 0055 numbers, as these use up future credit. You could end up in a situation of topping up your phone just to pay off the charges you have already been billed and be left without any credit.
Other means some companies offer for keeping track of how much you’re spending include spend alerts, where you get a message to tell you you’ve reached your nominated spending level for a given period of time (one month, say), or a toll-free number for checking your account balance. These apply to postpaid services; the latter also to prepaid.
If your kids — or you — send lots of SMS, look to save money with a plan offering cheap SMS or a large ‘free’ allowance. For GSM services check out Phonechoice for the cheapest SMS charges.
And finally, resist the urge to have SMS conversations: “where r u” — “@ bus stp” — “wen wil u b here” — “in 10” – “c u then!” — “gr8!” — “ciao” — “bye”. Scintillating stuff, and no doubt mildly entertaining, but worth about $1 of calls each? Probably better to just call — or simply w8.