The cost of the smart phone in your pocket

The news is out: smart phones are officially addictive. A study by telecom regulator Ofcom shows that people are using mobiles instead of talking to their children, and resorting to texts while in the bathroom.

Given the cost of smart phones, and the online shopping temptations they offer, they are also becoming an important contributor to growing serious debt problems. A cherished handset can eventually contribute to someone needing to seek help via a debt management plan or an IVA for higher levels of unsecured debt.

Anytime anywhere

The research revealed that 37% of adults and 60% of teens described themselves as ‘highly addicted’ to their smart phone. The devices have also helped blur further the boundaries between leisure and work. 30% of users take personal calls during working hours and 70% have taken work calls while on holiday. Sleep is not necessarily an escape either: four out of five users leave their phone on all night by their bedside, and two in five people admit to immediately using their mobile if it wakes them.

Communication costs

Buying a smart phone is never cheap – a two year contract can easily come to more than £800 before you have bought any extras or apps, or waited on hold to a ‘free to landline’ 0870 number. Mobile charges for web browsing, using email, MMS and other data settings increase further if you use your phone abroad and leave ‘Data Roaming’ switched on in your network settings.

However, it’s a smart phone’s abilityto be able to convenientlybrowse products and pay for purchases that can rapidly cause even more serious debt problems. The ‘one-click’ buying culture mixed with notifications from your shopping apps of a mobile exclusive discount has spread across the entire smart phone experience. A quiet moment alone in a coffee shop or on the train can easily turn into a shopping expedition that wasn’t planned. It is the immediacy of a smart phone that makes it tempting to grab a ‘bargain’ without thinking about the consequences.

With a smart phone it is easy to accumulate a very large phone bill over a month, and not all users can pay the bill straight away. Like all debts, things can move fast. Increasing numbers of smart phone users are finding big phone bills among their most pressing debt concerns. What starts as a shopping trip can go all the way to personal bankruptcy if events are not managed.

The technology may be new, but the solution to smart phone debts is not. Controlling spending and paying bills in full each month are both crucial. For users who find that things have gone too far, the first port of call might be a debt management plan, where a reputable debt advisor negotiates with creditors on your behalf. If a collection of unsecured debts has already mounted to levels of £12,000, an Individual Voluntary Arrangement (IVA) can provide legal protection and a reliable route back to solvency . With the right support, given early enough, few smart phone users have to find themselves facing bankruptcy .