Mobile devices

The Pros And Cons Of Phone Contracts: To Sign Or Not To Sign

mo-phone-contractYou certainly have a lot of options nowadays when it comes to mobile service providers. The UK market is flooded with mobile service operators, and choosing between them can prove difficult. With so many providers and so much competition, companies are constantly vying for your business and offering special phone contract deals to lure you in. However, when you’re making you choice the first important decision that you need to make is whether or not you should sign a contract. Today we’re talking about the pros and cons of signing mobile phone contracts, to help you decide what the best thing is for you to do.

What is a Phone Contract?

Basically, when you go into a mobile phone operators shop you have two choices. You can either sign a contract, or simply get a SIM card for service and use pay as you go. A contract will give you a certain calling plan, with a fixed number of calling minutes, text messages and a data allowance if you have a smart phone. Contracts are generally for twenty four months, though some operators offer twelve or eighteen month contracts and you’ll pay a set amount of money per month every month of your contract. Pay as you go options don’t require you to sign a contract or pay a set amount. Instead, you load your phone with as much money as you want, either online, through the phone or in a shop, and then you use your phone until that money runs out, at which point you can put more money on if you want.

The Benefits of Signing a Mobile Contract…

There are some advantages to signing a contract. You’ll have a set monthly bill, which might make budgeting easier, as long as you keep to the terms of your contract. You will have reliable service, there’s no chance of you running out of credit on your phone and not being able to make an important call. Phone contract plans also generally offer cheaper calling prices per minute and cheaper text messages than pay as you go plans do. Plus, there are often additional benefits for signing contracts. We’ll discuss these more below, but you are often offered free or discounted mobile phones in return for signing a contract with a mobile service provider. The convenience of a contract plan, along with a free or cheap hand set, tempts many people into signing up, and you can get some great deals.

The Disadvantages of Signing a Contract…

However, there are some down sides to signing a contract. First of all, you’re tied to one provider. You can’t switch to another company who offers better service or prices without breaking your contract and having to pay a fee to compensate the mobile operator. These fees are generally expensive. And you can well end up paying more than you should for a contract. Because contracts come with set amounts of calling minutes, text messages and data allowances, you have to make sure that these limits reflect your phone use. If you get a plan that’s too big for you, you’re going to be needlessly paying for minutes, messages and data that you don’t use. On the other hand, if your plan is too small, you’re going to be paying premiums every month for going over your limit. The cost of using extra minutes, messages and data over what your plan offers you are often high and can add up very quickly. Plus, you have to pay your monthly bill no matter what, even if you don’t use your phone at all. Whilst pay as you go prices are a little more expensive than contract prices, at least you only pay for what you actually use.

The Secret of Phone Contract Deals…

As we mentioned above, many companies offer phone contract deals, where you get a free phone when you sign a contract. However, these deals are not what they appear. If you compare the cost of a simple calling plan with the cost of the same calling plan including a free mobile phone, you’ll see that the plan with the phone actually has a more expensive monthly fee. This extra fee added on top of your monthly bill is how the company makes you pay for the "free" phone. And if you add up all the extra fees each month for the length of your contract, you’ll probably find that you end up paying more in extra fees than the actual price of the phone. It’s nearly always cheaper to buy the phone yourself and then sign a contract for just a calling plan.

When to Sign or Not Sign…

The decision to sign a contract with a mobile service provider really depends on you as a user. Generally, heavy phone users benefit more from contracts than light users do. If you use your phone often, signing a contract might be a good way for you to save money. But you do have to make sure that you choose a calling plan that accurately reflects your usage, rather than a plan that’s too big or too small. Light phone users generally benefit more from using pay as you go systems, since there are very few contract plans that include low numbers of calling minutes and text messages. Going with pay as you go will ensure that you only pay for what you’re using, and don’t get stuck with lots of extra minutes that you’ve paid for but not used. As for contract deals that include free or discounted mobile phones, you should really only sign these if you don’t have the money to pay for a new phone right now but you need one. You will end up paying more than the cost of the phone itself, but you won’t have to pay up front. Basically, you’ll be buying a phone in instalments, which is convenient for many people, though it may be more expensive.

A post by Kidal D. (3253 Posts)

Kidal D. is author at LeraBlog. The author's views are entirely his/her own and may not reflect the views and opinions of LeraBlog staff.
Chief editor and author at LERAblog, writing useful articles and HOW TOs on various topics. Particularly interested in topics such as Internet, advertising, SEO, web development, and business.

One Comment

  1. Johnny Bentel

    Hahaha, that lady is really cool and damn mad on that phone; if she can, she would kill it no matter what 🙂

    Anyway she gets all reasons in the world to be mad with nowadays phone contracts thought for mobile operator’s prosperity only.

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