Choosing Between Phone Contracts Vs. Pay As You Go

Some say phone contracts are the best if you want the latest handset and competitive rates on your call, text and data services. Others are saying to ditch the contract and opt for Pay As You Go because of the greater control you have on your phone bill. If you’re like most people who don’t know which of the two is the best option for you, which advice should you follow?

To help you better understand your options, here is a quick comparison and guide about phone contracts and Pay As You Go deals.

What are phone contracts?

Phone contracts are attractive for customers who want the latest handset because the deal offers you a choice of handset with a bundle plan. This means that you don’t need to buy a Smartphone upfront. You can spread the cost instead in over 24 months, the typical contract term for these deals. In exchange for the free handset, however, you will have no other choice but to commit to a lengthy contract where you are required to pay a fixed fee per month. Make sure you pay on or before your due date. Otherwise, your credit score may be affected.

What are Pay As You Go deals?

As opposed to phone contracts, Pay As You Go deals are not associated with any contract. There’s no monthly fee to worry about. But what you do need is to buy your own handset and SIM card. You’ll also have to top up your phone with credit before you can enjoy your phone services. The best thing about Pay As You Go is the fact that you’ll have more control on your phone bill, which means huge savings in the long run. You’ll only need to top up your phone when needed but you do have to purchase your handset in cash beforehand.

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5 Reasons Why a Phone Contract Is the Best Option

Price hikes are not uncommon in the mobile phone contract industry. With the recent news of Ofcom raising the annual charges for carriers, subscribers are alarmed at the potential price increase on their phone bills. If you’re a phone contract subscriber, there is no other way to take this news. It’s bad news whichever way you look at it.

Despite the possible price increase and other downsides, however, there is no denying the fact that phone contracts still offers a variety of advantages that still works with many subscribers. Among these advantages include:

Free handset

When you get hooked to a phone contract, there’s one chief advantage you can immediately enjoy. You get a free handset, which you don’t have to purchase in cash up front. As part of the contract offer, you can choose a handset together with a contract plan, the cost of which is spread over the contract’s term usually over 12 months, 18 months or 24 months. This means you will be paying a monthly fee to cover both the phone and the phone bundle’s cost. Your phone bundle is what covers your call, text and data usage per month. Read more about this here.

Exciting handset choices

As a way to lure customers, major carriers in the UK always make sure that they include the latest handsets as part of their extensive mobile phone collection. If you’re hoping to own the latest iPhone, Samsung Galaxy or HTC phone, getting a contract is a cheap way to do so. You don’t have to buy the phone upfront. Instead, you pay for it in increments on a monthly installment basis. Provided that you have good credit and you can provide proof of income, availing the latest handset through a phone contract is as easy as it gets.

Cheaper rates

Contrary to what some experts say, the right phone contract plan can actually save you money in the long run. If you’re particularly a heavy mobile phone user, you can enjoy cheaper rates on your phone services with the right bundle plan. The trick is to make sure that you know your monthly phone usage so you can sign up for a contract that is perfectly tailored to meet your needs. When shopping around for a phone contract plan, don’t just focus on your handset choice but also on your bundle plan. Balance is the key to getting the most value out of your phone contract deal.

Exclusive promotions

When you’ve committed to a 24-month contract with your carrier, you also get to enjoy access to exclusive promotions and incentives. If you’re mid way through your contract, for example, you can call customer service and ask about the latest promotions. If you’re eligible, chances are high that you might get additional minutes, texts and data on your current plan. If you’re close to ending your contract, you can also haggle for a better and cheaper deal. Speak with customer service and request for a better package. Otherwise, you might look elsewhere for a better deal. If you do this right, this haggling technique works like a charm.

Upgrade option

If you’ve been with your carrier for quite some time, you may also be eligible for an upgrade option. For example, if you own the iPhone 6 and you want to upgrade to iPhone 6S, you can do so with a phone contract. You cannot do that with pay as you go. When you do upgrade, your fixed monthly fee may also increase but not necessarily if you learn some haggling skills. The best time to upgrade is when your contract is close to ending.

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How to Haggle for a Cheaper Phone Contract

If you’re close to the end of your phone contract and you want a better and cheaper deal, this is the best time to make use of your biggest weapon – your loyalty. With competition among carriers in the UK getting stiffer and fiercer by the day, your current provider will go extra lengths to keep you hooked to their brand. They are ready to offer incentives provided that you sign up for another 24-month contract.

Using your loyalty as a haggling technique is one of the easiest and surefire ways to get the best end of the deal. If you are particularly happy with your current provider and you plan to stick around, this is the best time to pick up the phone and speak with customer service. Whether you want extra minutes or you want a lower monthly fee, the trick is to use your ammunition well. When done right, you could save more than £100 per year.

Some subscribers who have haggled with their providers were not only able to save money but also avail a new phone at no extra charge. It’s really all about using your loyalty card especially if you’ve been with your current provider for a while. If they can’t give you what you want, you can threaten to look elsewhere. Chances are high that customer service will transfer you to another department where you’ll likely get what you want and more.

But how exactly do you haggle for a cheaper deal? It’s no rocket science. In fact, if you keep in mind the following steps below, you’re in the right track.

Ask for a cheaper tariff

Like every other customer, we all want a better tariff. Once you are connected with customer service, there’s really just one thing you need to do. Ask for a better and cheaper tariff. Tell the customer service rep that you’re not happy with your current tariff. You can go about this step two ways. Back up your claim with research by getting some data from top comparison sites.

Or you can always go about it the old fashioned way, that is, haggle with confidence. Ask about the best tariff available. If it’s too expensive, tell it as it is with confidence so the operator believes that you’re serious to get a better deal. Otherwise, they lose you and the carrier doesn’t want that.

Ask to be transferred to the disconnection department

If you didn’t get the phone upgrade and better tariff that you wanted, you could ask to be transferred to the disconnection department. Tell customer service that you’re not happy with the offer and you’d rather look elsewhere. In most cases, they’ll try to lure you with another offer. Other times, they’ll transfer you to another department where the priority is to make sure that you remain a customer. Once transferred to the retention department, just repeat your request for a cheaper deal. Stand by your decision to disconnect if they didn’t give you what you want and chances are high that you’ll end up the winner.

Avoid saying yes to the first offer

If offered an upgrade and a better package, don’t say yes the first time. Remember that the main goal for most carriers is no longer to convince customers to avail a phone contract but to convince them to stick around. Majority of people already have phones. The biggest competition today is customer retention. By saying no to the first offer, you’re basically opening the gates to even better deals, which you deserve for being a loyal customer for a long time.

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