When discussing mobile phones, this is probably the number one question I am asked by friends, family and colleagues. Unfortunately this is not an easy question to answer without finding out more about how a person uses their mobile phone. How often do you actually use your handset to make calls? Do you go online with your phone? Would you be lost without GPS navigation on your phone? (Pardon the pun).
Choosing the right type of mobile phone deal can be a tricky business. There are so many options available to you that the process can become confusing. In this article I will give you an overview of the three main types of mobile phone deals and present some of their advantages and disadvantages in the hope that it will help you find a deal that’s right for you.
Contract deals are the most popular type of mobile phone deals. A contract deal will tie you to a contract for a set length of time, and will include a phone (sometimes free), a sim card and a set allowance of monthly minutes, texts and data. You will be billed extra if you go over the set monthly allowance.
Advantages of a contract deal:
- Get the latest and most technologically advanced phone for (usually) no initial cost.
- Pay a fixed amount per month for a set allowance of minutes, text messages and data: you can choose the right allowance to suit your own usage patterns.
- Many mobile phone shops and websites offer free gifts and cash back deals with a contract, although you should be careful with these types of deals. Always read the small print as they can end up costing you more over the long run.
Disadvantages of a contract deal:
- As the handset is subsidised by the network provider you can end up paying much more over the course of your contract than if you purchased the phone outright.
- You will be tied into a contract for at least 12 months and often 24 months, meaning little chance of upgrading before you contract expires.
- The handset is often locked to one provider’s network, meaning you cannot use it with another provider’s network after your contact has ended, although sometimes these phones can be unlocked at a cost.
- You may not be able to get a contract deal unless you have a good credit record.
Sim only deals:
Sim only deals have become very popular in the last few years. When you sign up for a sim only deal, you will be sent a solitary sim card: no mobile phone is included in the deal. You must use the sim card in your existing handset.
Advantages of sim only deals:
- It’s cheap. Purchasing a sim only deal usually involves no initial outlay of cash and often gives you more minutes, texts and data then a contract deal for the same monthly cost.
- The length of the contract can be very short. Sim only deals range from as little as 30 days all the way up to 24 months, meaning you can call time on the contract when you want to. (Again, pardon the pun).
Disadvantages of sim only deals:
- A mobile phone is not supplied with a sim only deal. This means that you will have to own a compatible mobile phone which may have to be unlocked prior to purchasing a sim only deal.
Pay as you go (PAYG) deals:
Pay as you go deals have been around almost as long as contract deals. With a PAYG deal you can purchase a phone and a sim card and only pay for the minutes, texts or data that you actually use. Payment must be made in advance of using the phone.
Advantages of PAYG deals:
- PAYG is a relatively cheap way to own a mobile phone.
- You only pay for the minutes, text and data you actually use, so no monthly bills and no nasty surprises.
- No credit is given: a clean credit record is therefore not required.
Disadvantages of PAYG deals:
- Pay as you go phones do not tend to be the latest and greatest mobile phones, often lacking the latest technology and applications. To be fair this is becoming less of an issue these days with many basic phones having some advanced functionality.
- If you are a heavy user of your mobile phone you will probably end up paying more on PAYG then if you were to purchase a large usage allowance with a sim only or contract deal.
- No credit is given: payments for usage must be made in advance so running out of credit can cut your conversation mid call!
So, what is the best deal for you? Generally speaking, if you hardly ever use your phone, then a PAYG deal is recommended. It will be the cheapest option for you in the long run. However, if you’re always on the phone and enjoy social media applications and the latest features, then a contract or sim only deal is recommend.