When it comes to purchasing a mobile phone, you’ve got literally hundreds, if not thousands, of models to choose from. However, once you have decided on the device you want, you’ve then got another decision to make: contract or pay-as-you-go.
Both of these options have their respective pluses and minuses, and your decision will ultimately come down to personal choice, budget limitations and your intended usage.
The most obvious difference between the two is how you pay for your phone. On a contract you receive a bill at the end of each month which is a reflection of your usage. With pay-as-you-go, however, you have to buy credit for your phone in advance and then reload it once consumed.
Let’s have a look at each option in a bit more detail and discuss the pros and cons of each:
Pay-as-you-go phones are a fantastic option for people who don’t like surprises. This is particularly true if you tend to get carried away when using a mobile phone and the ‘pay later’ reality sets in. With pay-as-you-go phones you are not tied into a contract and simply use whichever carrier’s sim card you like.
Nowadays, many mobile providers offer free sim cards, which is a great way to still use your existing phone and make the switch to pay-as-you-go. For example, free sim cards from Virgin Media Mobile are readily available and will have you connected on a pay-as-you-go basis in no time.
Probably the biggest advantage of pay-as-you-go phones is the control that you have over your mobile spending. There is no risk of running up a huge bill and you can include your mobile cost as part of your household budget.
However, if you are the kind of person who simply loves to chat then a pay-as-you-go phone may not be right for you. It’ll probably work out more expensive over the course of a month compared to an unlimited contract deal.
Also, pay-as-you-go phones might leave you in an annoying situation. For example, you really need to make a call but have no credit – you’re going to have to reload your phone before you can do anything. Calls to emergency numbers though can still be made even when you have no credit on your phone.
Some people love getting the latest handsets when they first come out and this is a definite benefit of contract-based phones. Usually, you can upgrade your handset each year providing you renew your contract with the mobile provider. This is great for people who don’t mind being tied down for another 12 -18 months and just want the latest model.
One of the biggest problems with contract phones is the danger of overspending. Getting a nasty surprise when you receive your monthly bill could become commonplace if you neglect to adhere to your tariff. This is especially true if you use your phone abroad and don’t realize the cost of calling home.
Many pay monthly deals offer unlimited text messaging and unlimited calls. Furthermore, they often come bundled with data allowances for a complete package. Therefore, if you are a heavy user who likes to have the latest phone, then a contract is probably going to be best for you.
If, however, you want the budget-friendliness of pre-loading your phone and only use it infrequently, a pay-as-you-go option is more than likely going to suit you just fine.