A contract mobile phone tends to be the most popular way of purchasing a new mobile phone in the UK. They are also known as Pay Monthly Contracts, Contract Mobile Phone Plan, Contract Mobile Phones. Despite the different names they all mean the same thing. The basic premise being that you pay a fixed monthly amount (this can raise with inflation) for a fixed period of time usually 12 months, 18 months or 24 months to a Mobile Phone Network (like EE, O2, Three or Vodafone).
The network in return will supply you with a fixed amount of monthly minutes, texts and internet data. Some will also include extra benefits such as EU Roaming, Priority Concert Tickets or £1 Movie rentals.
The cost of purchasing the handset is usually included in the monthly line rental however some mobile phone retailers will sometime ask for an upfront payment to help keep your monthly payments down.
If you go over your minutes, texts or internet data that was specified in your contract you will be charged this in over and above your set monthly amount.
In summary a contract mobile phone gives you greater freedom over your mobile phone, as you do not need to worry about topping up your credit before you can use your phone. You should however keep an eye on your spending in case you are regularly going over those minutes and texts!
Pros and Cons of pay monthly mobile contracts
As we touched on above a contract mobile phone plan would give you a set amount of minutes, text and data for a monthly figure. This means by paying an upfront fee and committing to sign in for a set period you reduce the cost of your minutes, texts and data usage when compared to the pay as you go unit cost.
As you will be tied into your agreement with the network from with anything from 12 months up to the longer 24 month contracts, you need to consider this and ensure you will be able to make the monthly repayments for this minimum amount of time. If you choose a tariff that doesn't offer you enough minutes or texts the networks will usually allow you to change your tariff to one that offers you a better allowance this will usually cost more, they will not however let you reduce below the minimum amount you agreed to spend.
At the end of your minimum term contract, (normally 30 days before) you will have the choice to leave the network by giving your network provider 30 days notice, upgrading your contract deal by taking a new handset and signing into a further commitment period or you can continue on the tariff you are on with an extension to the contract term. You can cancel at any time by giving 30 days notice.
What you should consider when buying a new contract mobile phone deal
As with any financial purchase there are a few things you should consider before purchasing;
This will be one of the most important choices you make when purchasing your new mobile phone. Choosing a network provider that doesn’t offer you full coverage in the areas you need it most, (i.e. at home or work) will result in you paying for something that you may not be able to get the full benefit from.
Also how you will use your phone will form part of your basis of network choice. As you may get really strong reception for voice calls and text messages but then a poor internet coverage, so this needs to be thought about when signing up. In reality most people will use their home broadband when at home, so bear that in mind when making your decision.
If you are someone who likes to change their handset regularly then signing into a 24 month contract might be something you should give some thought to. Obviously 24 month contracts are the most popular term set by the networks, so whilst 12 and 18 month contracts exist they will be harder to come by and on some networks this deals will be nonexistent.
You can sometimes upgrade your phone mid way through your contract but there will be charges involved as the network will need to recuperate the original charges you committed to, regardless of you agreeing to sign up for another contract term.
Knowing how you will be using your phone will help you to find the right tariff for you. If you aren't interested in making lots of phone calls but you do want to be able to surf the web or stream music whenever you want will mean that you should look for a tariff that offers you a generous gigabyte allowance of data.
If you have the gift of the gab and like to talk a lot and internet usage isn't something you need too much of then you should look for a tariff that has a high or unlimited minutes allowance. Most unlimited tariffs do have fair usage policies these are normally in the thousands so keep this in mind!
Most of the time purchasing a contract that bundle in a mobile phone, and an allowance of minutes text and data is the cheapest way to buy your handset. However, there are times when it may be cheaper to buy a SIM only contract and pay for a handset outright and separately purchase a SIM only deal. A SIM only deal is where you just get a SIM card but still get an allowance of minutes, text and data from the Network provider. These often come with very short 30 day contracts for the ultimate flexibility.
There are hundreds of different mobile phones to choose from so you need to select a handset that you think you will be happy to use throughout your contract term. You may need to think about what you want from phone, i.e. taking photos, listening to music or surfing the web. Different devices will enable to you to do different things or some better than others. Most of the time you will also get a choice of colour, or internal memory the phone has.