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What's better:Phone contract vs pay as you go?β˜ŽπŸ“ž

What's better:Phone contract vs pay as you go?β˜ŽπŸ“ž

So your phone contract is almost due for renewal and you are considering if to get a new phone on contract or a pay as you go. In this brief guide we will explore both options and the to allow you decide which trumps the other.

Pay as you go

Pay as you go is very flexible. You only pay for what you use and if you use little of your phone then you pay very little. If you use a lot more of your phone for calling, texting and browsing the internet then you might begin to see little value in the pay as you go model.

The great thing about pay as you go is you only use what you have paid for and you cant find yourself owing money to the network provider for going over your usage allowance.

The only downside to this is that if you want a nice shiny phone you will have to pay it outright. Take for example the new Iphone X which goes for just over Β£1000 or the samsung galaxy note 9 which starts at Β£900. These are pretty expensive phones but even a typical used smartphone will set you back a few hundred pounds at the very least.

Topping up

Topping up a pay as you go phone is relatively easy. A lot of providers give you the opportunity to top up online or even set up a recurring top up. Having to buy a voucher can be a hassle but if you stick to the other pay as you go top up methods you will find that topping up is a lot straightforward and in some cases comparable to a phone on contract as you don't even have to remember.


Pay as you go phones are the most flexible. You can change providers at any time and you don't need to inform anybody of your intentions in advance.

There are different type of sim options for pay as you go phones.

They include:

12 month fixed plans:

These are cheap enough but still feel somewhat like a phone contract. You have to pay a penalty if you leave early but this is substantially cheaper than what you would pay on a phone contract with a comparable phone.

Tip: The rates on SIM-only plans tend to be slightly higher than those on phone contracts.

30 day rolling plans:

These are just like the 12 month fixed plans. The only difference here is that it's for 12 months and you can switch networks or plans without any penalty.

To summarise:

  • Cheaper
  • More flexibility
  • No overpayments

Contract phones

Contract phones are more popular as they allow you to get a new shiny phone with free calls, texts and mobile data for tens of pounds a month. They are essentially a loan for the phone with data, calling and texting packages added inclusive of the total monthly price. At the end of the contract you will have a new phone but chances are it will already be old due to the pace at which manufacturers such as Apple and samsung release their phones.

Contract phones aren't particularly cheap but they are a means to an end as you can obtain phones that would have been otherwise out of budget for the fraction of their cost per month.

Topping Up

Contract phones do not require top ups but the devil in disguise is the fact that you can easily go over your data allowance or call numbers that cost you more per month without much notification from your provider. A Β£25 bill could easily turn into Β£45 and more if you don't keep a close eye on your current allowance. It's not a coincidence, your friend probably has a thing or two to say about their phone contract to. Phone networks have been caught in the act several times doing what you might describe as shady.

Most phone networks now have apps which you can use to monitor your remaining data, text and call allowances for the month to avoid you overspending. In some cases the network provider will give you the option to restrict your phone to the available call, text and data allowance you have and nothing more.


Contract phones don't have much flexibility. You can't just decide you no longer want your phone and simply walk away but you can upgrade to a different phone on the same network but it will usually have to cost more for the network to see any upside.

You can only cancel a phone contract if:

  • You are within 14 days of receiving the phone and you haven't waived this right.

  • Your network provider rises rates midway through your contract

Ultimately the type of phone package you choose will depend heavily on your usage and they comparable deals available.

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What's better:Phone contract vs pay as you go?β˜ŽπŸ“ž
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