Contract vs Pay-as-you-go Mobiles
When it comes to choosing, and applying for, a mobile phone, one of the key decisions you’ll need to make is whether to opt for a mobile phone on an annual contract or whether you want a prepaid mobile phone. Both of these options have their advantages and disadvantages so making your choice depends on how you’ll be using your mobile phone and the kind of mobile phone that you want.
- Contract Mobile Phones
With a contract mobile phone you are required to sign up to a service plan for a minimum term – usually 12 months. You’ll be required to pay a monthly fee for line rental, which may or may not include some inclusive call time, as well as for any calls you make each month. The advantage of a contract mobile phone is that the networks will subsidise the cost of your phone so you can get one of the latest stylish models for free, or at a substantial discount. For this reason, it’s important to make sure you have suitable insurance, as if your mobile phone gets lost, damaged or stolen you’ll have to pay the going rate to replace it. You will also be required to pay your monthly line rental until the end of the contract.
Contract mobile phones offer the best deals if you are going to be using your mobile phone on a regular basis, as most do include some free call time. They also ensure you will always be able to make calls, as long as you pay your monthly mobile phone bill. There are a number of deals available from each of the major networks varying in price from tens to hundreds of pounds and offering varying amounts of inclusive call time each month. Your free minutes can usually only be applied to calls to fixed landlines and to mobile phones on the same network but increasingly the major mobile phone networks are offering deals that let you call any mobile phone network using your free call time.
You also have the option of upgrading your mobile phone at the end of your contract. This means you can choose a brand new mobile phone for free or at a reduced cost, depending on your provider. However, you will be tied into another 12-month contract period. Click on this link for more details of upgrades.
The disadvantage of a contract mobile phone is precisely that – you will be tied to your current mobile phone network for a minimum period, and there are usually penalties payable if you wish to terminate the contract before the end of the term. In addition, the mobile networks usually require multiple proofs of identity as well as your proof of address when you sign up. The network will usually want to check your credit worthiness too. If you have had credit problems in the past you may not be accepted for a mobile phone on a contract basis.
- Pay-as-you-go Mobile Phones
Pay-as-you-go phones have proven extremely popular with the UK public. Choose a mobile phone network, and buy a suitable phone. That’s it! You pay in advance for any calls you make and can check your remaining credit by calling a special number on your mobile phone at any time. Most pay-as-you-go mobile phones come with some call credit straight out of the box and you can purchase extra credit ‘top-up’ cards from most mobile phone shops, supermarkets, corner shops and newsagents whenever you need them. Most networks also allow you register details of a credit or debit card with them, so by calling the network from your mobile phone you can add extra credit to your mobile phone as and when you need to.
There are disadvantages to pay-as-you-go mobile phones. Call charges are usually significantly higher than the call charges on contract mobiles, as pay-as-you-go deals don’t require you to pay any form of line rental. In addition, pay-as-you-go mobile phones aren’t subsidised in the same way as contract mobile phones. Indeed, the networks have reduced the level of subsidy on pay-as-you-go phones as users weren’t making enough calls!
Pay-as-you-go mobile phone users don’t get offered upgrade deals either. You do have the option of buying a new handset and putting your existing pay-as-you-go SIM (Subscriber Identity Module) card into it but you’ll once again be paying full price for a new mobile phone handset. However, shopping around online is the best way to get your hands on the latest pay-as-you-go mobile phones at the lowest cost, and with the least possible hassle.
If you don’t use a mobile phone much or simply want one for emergencies (if your car breaks down!) then pay-as-you-go mobile phones offer the best deal. They’re also the only option for under 18s, who are unable to sign up for contract phones at all. So if you want all the convenience of a mobile phone without being tied down to a contract, opt for one of the pay-as-you-go deals offered online.