Be careful next time you spot a stunner with a gorgeously sleek body. See a sexy new mobile handset and often all you can think about is getting your mitts on it. Yet, when comparing phone deals, it’s the tariff that counts — ignore tempting distractions like handsets or cashback.

The number of phone package combinations out there is vast. There are over ten mobile networks, each with multiple tariffs, sold at different prices. The networks make cash from our confusion, leaving many folks paying more than they need to — and this is big money.

Before you start
There is nothing more important than working out exactly what you need. If you get a contract with too many minutes and texts, they will be unused so you will end up overpaying on the monthly fee. Too few and you will be overpaying for the excess calls. So take a look at a few bills if you can, and see what you actually use. Often it differs from what you think you use.

Things to check
● How many calls and texts do you use on average?
● Do you mainly telephone at peak (usually 7am-7pm midweek) or off-peak?
● Are most of your calls to other mobile networks or to landlines?
● How many texts do you send?
● Do you often use your phone to access the internet? If so, data costs are important too.

As a rough rule of thumb, use less than 150 minutes of calls and 100 texts a month and Pay-As-You-Go (PAYG) is cheaper than contract, as the higher call cost is offset by the lack of monthly fee.

For everyone else, contract usually wins. Sadly, those with poor credit histories have no choice. Contract applications are credit scored, so PAYG becomes the only option.

Step 1: Haggle with your network
Networks fight desperately to win new customers and retain the ones they have got and you can use this to your advantage.

If you have already got a mobile contract and it’s expired or is close to expiring, you are holstering a serious MoneySaving weapon … the threat of leaving.

If you have time, before doing this check out the cheapest tariffs elsewhere (see step 2) as a benchmark then call up and say you want a much better deal. Remember mobile prices tend to drop each year — so the same tariff should never be an option — you want better.

Ask what its best available tariff is, then if its offer isn’t good enough tell it you’ll consider leaving if it can’t match the deal. That’s because the crucial part of this technique is getting through to what it calls the “disconnections department” but internally will be known as something like “customer retentions”.

In other words, its real job is to keep your business and, because of that, it has much more power and discretion to do it. If you’re pushing and your bluff is called with a “sorry, we can’t do that, I’ll arrange cancellation”, just back off. A quick “I need to think about it and I’ll call you back” is an easy way out.

To show the power of this, I remember when I’d just started dating a girl, I walked past her £75-a-month mobile bill and baulked. So I got her on the phone and haggling. She called up, got through to disconnections and was soon £25/mth — a saving of £50/mth or £600 a year in just 10 mins. Depending on how you view the romance of such a thing, you will either be shocked or unsurprised that she is now my wife.

Full step-by-step guide on this (mobile haggling, not dating) at www.moneysavingexpert.com/mobilehaggle

Step 2: Finding the best tariff
If the haggle didn’t work or you are not already on a contract — the core job is to hunt out the right tariff. This dictates the number of free minutes (if any), call costs, texts and data use included.

The same tariff can cost vastly different amounts, depending on the handset, retailer and cashback deals. Don’t let any of these distract you. Over the long run, the tariff is the biggest factor impacting costs.

● Contract mobiles: Tariff retailers use eye-catching cashback deals to coax you into buying. Ignore them and focus on picking the cheapest tariff first. Only afterwards check if cashback is available, that way if the cashback goes pear-shaped, you are on the cheapest deal anyway.

● Pay as you go: Here, the danger is you will be lured by a cool handset. Mobile providers often deliberately price these low but the cost of the underlying tariff high, so you think “wow the SexyPhone Y67 is only £10 here” yet the savings made are dwarfed by huge call charges. For everyone other than granny-in-the-glove box (emergency only) users, focus on getting the right tariff.

To help with this, there are a number of web comparison sites to give an indication of prices these include www.Onecompare.com, www.mobilephonechecker.co.uk and www.moneysupermarket.com

Tricks to cut the bill further
Yet it does not stop there. The mobile world is complex and there are lots more ways to cut costs.

● Cheap iPhone: If you are after the overpriced Apple, be prepared to sign up to a much costlier tariff than necessary. Normally I would say no one should be paying much more than £30 a month on their mobile bill, no matter how many calls made (apart from overseas), but not with an iPhone. This bizarrely means the cheapest way to get an iPhone is to pay more per month, but on a shorter contract — full details at www.moneysavingexpert.com/cheapiphone

● Text for free: You can send the mass of info in an email from your phone for fractions of a penny, yet a 100-character text message can cost 10p. Networks make a fortune from these, so if you are near a computer, just text free from the web using sites like www.cbfsms.com or you can install software on your phone that sneakily sends texts for a fraction of the cost via your mobile internet. Step-by-step instructions at www.moneysavingexpert.com/freetexts

● Unlock your handset: If you don’t want a new phone, then you can get a sim only deal for next to nothing. A sim is the little card you shove in the back of your mobile that gives it its identity. These can often be dirt cheap, though as most handsets are “locked” to a specific network, you need to unlock it first (it is legal, unblocking is illegal). Sometimes there are free codes on the internet, or you may need pay your network to get hold of the right one.

● Recycle your old mobile for up to £150: You can flog your old one and get up to £150 in cash using mobile recycling sites. Yet as these all pay different amounts for handsets, use www.mobilevaluer.com, which tells you who pays the most.