After getting a new mobile phone, there are several types of plans available for you to choose from: you can either purchase a mobile phone, then get a SIM and put in it or sign up a contract on your handset. But which is best?
Difference Between Contract Phone Plans and SIM-only A pay monthly mobile contracts involve paying a fee that is fixed every month, normally for 24 months. There is very little, if anything, that you'll pay upfront when signing up; your monthly bill is going to include both your mobile tariff plus your handset payment.
On the other hand, a SIM-only plan covers your mobile service only. As the name suggests, you are just paying for using the SIM. Most people prefer buying their mobile phone outright, and then they sign up to the SIM-only plan so that they can get a mobile tariff. It's much less to pay every month, but much more to pay initially.
SIM-only Pros • It could cost less - In the long run, SIM only deals are cheaper than contract agreements since you aren't paying back the handset cost.
• You can stick with your old mobile phone - If you are attached to your old mobile phone, you can decide to keep it. You'll just put in your new SIM (after unlocking your phone if necessary) and you are good to go.
• You are free to choose - That is after around one month. Most SIM only deals available mean you aren't tied to one provider plus some contracts are often short (30 days). Therefore, if you do not like it, you can decide to swap. Provided you give notice as stated in any Terms and Conditions you have got, you will not be charged to change.
• Less rigorous credit check - Typically, your credit history is still going to be checked out; however, the criteria you will have to meet are not very comprehensive like a contract deal.
• It is the only way of getting a PAYG (pay-as-you-go) plan. PAYG works just as you would imagine, you only pay for your usage, meaning that you top up when and as you need more credit. It's useful if you require managing your costs and do not use your mobile phone very often. Cons of SIM only • Are you locked in? - You might find that you have to unlock your mobile phone if it is tied to a certain network provider that is different from your current SIM provider
• Handsets are costly - The cost of a mobile phone only can roll into hundreds, particularly if you love phones that come with many fancy features.
Pros of Contract Deal • Free handset - Although technically it is not really free, you will pay for the device in your monthly fee. It is a useful way to get the latest smartphone at a price that is more manageable.
• Free gifts - Some come with free gifts. You are always a winner; depending on the gift that you receive, this could be a clincher. Gifts often vary, but you can think in terms of phone accessories such as hands-free headsets, you can even get deals that will allow you access digital music services for free.
• Hassle-free - You exactly know what you are getting with a contract; even if you happen to run over your allowance, you'll not get cut off plus you will not have to remember topping up your credit.
Cons of Contract Deal • Credit check - You will go through a check on the history of your credit, and if it isn't good, a contract deal might not likely happen for you.
• Shackled - You are tied into one particular network provider, probably for a maximum of 24 months. That's a very long time if you live where the reception is poor, or you want to get a new phone.
• Exceeding your allowance - With a contract deal, you don't have to worry about minutes running out; however, if you happen to go over your allowance, the network provider will hit you hard with high charges.
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