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No doubt you have heard about all those new computer/Internet deals - the ones where you pay next to zero (or even nothing) up front and then pay a monthly fee (typically $70 to $80) which includes "unlimited" Internet access for the next three years. If you don't have the ready cash to buy a PC outright, one of these deals may be just perfect for you - at least for the time being. However, before you sign on the dotted line to get online, read the print carefully and make sure you've answered these questions, because there may be a better option. Do you really need a computer at home? Sure, the Internet is rapidly becoming an important tool of modern life, but it is by no means vital. If you don't have ready cash to buy a PC, consider using the Internet at the local library or an Internet cafe until you have saved up enough money to buy your own PC. But remember, you shouldn't attempt to try Internet banking from these places as they don't offer sufficient security. You need only about $1,600 to get a good home package. That $1,600 will no doubt get you an even better package in six months. According to Allan Asher, of the Australian Competition and Consumer Commissioner: "In 1996, a state-of-the-art PC with 200MHz Pentium chip cost more than $4,000. Now you can buy twice that power for half that price. Just how much debt can you afford to carry? Can you really afford yet another regular bill, of say $70 a month, especially one that goes straight onto your credit card, potentially creating even greater debt? Do you really need unlimited access? According to the Australian Bureau of Statistics, only about 13 per cent of home Internet users log on daily. Most of the deals offer "unlimited" Internet access at a price - a price much greater than charged for minimal usage. Small-time users may save hundreds of dollars over two years by opting to pay an hourly rate (which is not yet possible with the bundled deals) and benefit from improved cash flow. How unlimited is that access? It's time to read the fine print. Unlimited access does not necessarily mean unlimited downloads. Some contracts have reportedly restricted access by allowing users to connect for only a couple of hours at peak times How good is the Internet Service Provider? These so-called bundled or subsidised deals lock you in with a specific service provider. Anecdotal reports suggest that more ISPs are often busy - meaning you cannot always log in. Ask around before you sign up. What if I want to change ISPs? According to Asher, "The June 1996 edition of Choice showed the Internet access price for 30 hours per month was almost $100. Now $30 for virtually unlimited access is commonplace." Indeed, there are reports of free Internet deals coming to Australia very, very soon. Find out if you can change providers, and at what cost, before you sign. Most contracts are fairly restrictive. Can you log in for the cost of a local call? If you live in a regional area or a small town, you may have to pay STD rates (depending on the ISP) to log in. What's more, you can still be charged even if the log-in is not successful. Is this the computer I want and need? As a general rule, most deals offer what could be considered as "the bare minimum", in terms of memory (32MB), processing speed (380MHz), hard drive (4GB) and modem (56K). If you want to feel confident of happy surfing into the next century, aim for 64MB, 400MHz (or similar), 6GB and 56K V90 (or better). If you intend to use lots of state-of-the-art games, talk to some computer specialists about appropriate add-ons. What support services and/or warranty are provided? Support can, depending on your knowledge and the software installed, be necessary and expensive. While most retailers and/or manufacturers will offer a warranty for the hardware, they don't for the ISP. What extras are available? Most computer "deals" come with sweeteners - a colour printer or scanner, for example. As well as taking the retail price of these into account, make sure the computer comes with all the software you need. Is there a better way to purchase the computer? This is where a consumer's financial life can become very complicated. If you find an Internet-bundled PC deal, which is everything you want and you can afford the monthly payments, fantastic. Of course, there is nothing as good as cash up front and flexibility with an ISP. Before you sign up, however, it is still worth having a look at some other options. Many stores have interest-free periods of six months to two years. In some instances, you pay nothing for six months and then start paying interest, often as high as 24.8 per cent,on whatever debt is remaining. |