Pay monthly, or contract, phone deals are a very convenient solution for many people. They provide you with a new phone plus a monthly allowance of minutes, text and data. You pay an agreed on amount for this service each month for a contracted length of time, usually 12, 18 or 24 months. You do need to be careful not to exceed your allotted time, or you will be charged extra.
The advantages of having a monthly phone include getting a top end phone without having to pay for it outright. You may get a phone for free as part of the plan, or if you opt for a higher end phone it may be subsidised. In addition, paying for a pre-arranged amount of time, text and data is far cheaper than paying for it on a usage basis. And finally, since the accounts are arranged for direct debit payment, you don’t have to worry about losing service because you didn’t top off your account.
Contracts are usually negotiated for 12, 18 or 24 months. A 12 month plan will usually allow you to change your plan and phone after a year, but expect to pay for the privilege.
Most plans run for 18 to 24 months. With an extended plan comes lower monthly payments, and chances are, your phone will be cheaper, if not free.
You must be at least 18 years of age with decent credit to qualify for a contract.
You may be able to upgrade or cancel your contract for a fee, depending on your network carrier, but downgrades are rarely allowed.
To decide if a monthly contract is your best option, look at your phone usage. If you aren’t likely to talk on your phone for more than a few hundred minutes a month, or if you text more frequently than you talk on the phone, you may be able to save money with a pay as you go plan.
However, if you are consistently speaking on your phone for upwards of 400 minutes a month, plus texting, and would like internet service whenever you want; a monthly plan is probably a better way to go.
In addition, if you are interested in the latest and greatest phone, a contract plan usually allows you to get one on a monthly deal or a small one-off payment, rather than paying hundreds of pounds for a Sim-free or PAYG version.
Choosing Your Network
Most providers have contract plans, though there are a handful that deal exclusively with Sims-only and PAYG plans
Make sure to do your due diligence. Picking the wrong network can result in a two year nightmare.
Check network coverage in both your home area and in those places you may travel to over the extent of your contract. Remember, a cheap phone that never works isn’t a great deal. It’s better to find people using the network and ask their opinion rather than trusting online maps
Similarly, read customer reviews of the different networks, but avoid the comments on the services sites themselves, they tend to be rather self-serving. Look for objective forums and the like.
Again, consider how you (and your friends and family, if appropriate) use your phone(s). Take a close look at your monthly bills for a few months, if necessary, to understand your usage patterns, and find a plan that best coincides with your habits.
Compare plans carefully both within a service and between competitors. Keep in mind that some companies may have special group offers or certain telephones that are not available through another.
The biggest drawback of a monthly plan is that if you go over your allotted time, it can result in horrifically high bills. Your service is not cut off if you exceed your minutes, but you do get charged an extra high price for those extra minutes. And that money is still removed by direct debit.
You are also stuck in your contract unless your provider will allow you to break it. And you can rest assured that will come with a cancellation fee. Make sure you are happy with your plan and your phone before you commit to anything.
There is also a chance that your monthly tariff could be raised by your provider, and you would have to pay it, though moves are being made to stop this practice.