Cat3 and Cat5 cables are Ethernet cables. Ethernet cables are used to set up phone lines and Local Area Networks (LAN). There are six categories of Ethernet cables, with Cat3 and Cat5 being used the most. Both are being used less as they are slowly replaced by Cat6 cables.
The speed of the cables is the biggest difference between Cat3 and Cat5. Cat3 cables can only be used with 10Base-T networking at a speed of 16 megahertz (MHz). Cat5 cables are faster and can be used with 100Base-T networking. They transfer data at speeds up to 100 MHZ.
When Cat5 cables hit the market they cost much more than the readily available Cat3. Over time, this has changed. Cat5 cables are used most often, and the price has dropped for that reason. Cat3 cable is used less, and its cost nearly equals Cat5. Cat5 and Cat3 cable can run anywhere from £19 to £52 when purchased in quantities of 1000 or more feet.
Cat3 cables are mostly used for phone lines, and those few places that still have dial-up Internet. Cat5 cables are used for LANs to acheive high-speed Internet. With Cat6 emerging, Cat5 might be used less for LANs in the future.