Are Mobile Phone Contracts Really Economical?

This is the sad reality of the world today: technological advancements are getting more and more sophisticated, while the economy is getting much more volatile for the average employee. Although there are a lot of neat gadgets to purchase, people are slowly losing their purchasing power for them. This is why people continuously look for ways to save money while living a full life.

Mobile phones have become an integral part of people’s lives. No longer a luxury, a mobile phone is now a must have, whether you are a working employee or a rising entrepreneur. Each week, new handsets are being released, boasting new features and functions. However, how can an average bloke afford such expenses?

This is where mobile phone contracts come in. Normally, people buy mobile phones outright and then purchase a SIM card from their favorite network provider. Now, due to partnerships between mobile phone manufacturers and network operators, it all comes in one neat little package.

Budget-Friendly Contracts

So why are people saying that these mobile phone contracts are economical? Because for one thing, you don’t have to pay for the handset outright. For example, if you want to buy a new Samsung Galaxy S6, you might have to pay £1,900 more or less for it. Now, if you have that kind of money, it’s fine. However, not everyone can afford to pay that amount in one sitting. With mobile phone contracts, you don’t have to.

The purchase price is divided into small payments which you make throughout the lock-in duration. For example, if you opt for a 48-month contract, that £1,900 will be divided into 48 smaller payments. For some phones you might need to pay a deposit, but it’s more common to see a “no deposit” feature for these arrangements. This way, you get the handset you want, without having to break the bank.

Monthly Limits

Ever find yourself spending more than you need to? Ever had difficulty tracking your expenses for the month? If you’re that kind of person, then mobile phone contracts can help you budget your expenses. While the allowances feel limiting at first, it actually helps you control yourself from spending too much. With pay-as-you-go schemes, you might find yourself spending more than you need to if you don’t properly manage your expenses.

Most providers have a text service where you can check your balance for the month. This way, it’s easier to track how much you’ve spent already and how much you have left.

Some Things to Consider

The problem people have with phone contracts is that aside from the handset cost and the monthly fee, there are small charges and fees you need to pay. It’s just like paying for something via installment. If you pay in full, there’s no interest; if you pay via installment, there’s a small interest aside from the original cost. Going back to the previous example, if the original cost of the phone is £1,900, with mobile phone contracts you might be paying £2,400 or more if you calculate all the monthly payments for the handset alone.

There’s also a huge issue when it comes to excess fees. It’s a controversial move on the part of providers to keep the subscription open even though a client has reached their monthly limit. Any excess texts, calls or mobile Internet data will be charged.

Verdict

Even with its few hiccups, mobile phone contracts are still a great option for people who need to budget their finances. If you are trying to economize, try mobile phone contracts. It will definitely make budgeting easier for you.

Things to Consider Before Getting a Mobile Phone Contract

Mobile phone contracts are a great way to own the handset of your dreams without having to pay for the full purchase price. With its monthly limits and allowances, you can keep track of your mobile phone expenses. However, one shouldn’t take things lightly, especially since a mobile phone contract will bind you to a certain service provider for a very long time.

Before you think about signing that dotted line, here are some things you need to consider before taking the plunge.

There’s No Escaping the Contract

Once you sign that contract, you’re set for the entire duration of the agreement. This is why it’s important to double check everything before signing the contract. Wanting to opt out of a contract simply because you did not understand it completely is not a valid reason. Even if you discover a really negative clause in your contract later on, there’s nothing you can do about it. Ask questions; clarify terms and clauses that confuse you. There is no turning back from it.

Opting out of your contract early would result in a fine. The only way you can get out of your contract without any consequences is if the contract is terminated by the provider because of a mistake or error. Exceptions have been done over time for special cases, but never expect it for your situation. Have the mindset that you’re in the contract for good until it ends.

Reading the Fine Print

Special clauses, additional penalties and other exceptions will always be part of a contract, so it’s your duty to look at them, even if they seem boring and too technical. You never know when you’ll breach your contract, and ignorance will never excuse you. Exemptions are plenty, especially when it comes to unlimited deals. They say you have an unlimited number of texts, but in reality, it’s only for standard numbers, and premium, virtual and international numbers are not included. Read all the inclusions and exclusions carefully.

Take Advantage of Offers

If you want to get a mobile phone contract, it would be better if you do it when a promotion is ongoing. Sometimes providers won’t ask you to pay for the first three months; sometimes they’ll give freebies and accessories with the handset. Remember these offers are given by providers to entice potential clients – you can’t avail of these anymore once you’re a subscriber, so make the most out of it and wait for a good time to get a contract.

Start From the Bare Essentials

Most providers will offer services in a package; however, don’t be tempted by any of these, especially if you’re on a budget. You may think that you’re saving money by availing of their bundles, but in reality you might just be paying more for features you won’t even need. Look at the most basic offers and see if it’s something you can work with. You can always upgrade later on.

Compare and Contrast

Nothing beats the reviews and testimonials of people who are already using the service. A simple search on the Internet would do it, and most accounts would go into detail about what’s wrong with the service and what the company did about. You can also compare and contrast current offers from different providers to see which one suits your needs the best. Who knows, maybe you’ve overlooked a provider who could give you so much more.

The Mobile Phone Contract Checklist

Nobody likes poring over boring terms and conditions when they’re applying for a mobile phone contract. Sadly, most people simply skip the mumbo jumbo and sign on the dotted line, excited to have their most awaited handset. While terms and conditions may be boring, they’re extremely important. Unfortunately, most people only find out the importance of their contract terms when they unknowingly break them and get penalized.

If you really don’t want to spend an hour understanding the terms and conditions of your contract, we’ve gathered a simple checklist of things you need to look out for. Understandably, some providers make term agreements boring and complicated so people won’t take the time to read them, but as long as you know where you stand with the items listed below, you’re golden.

Network Coverage

One of the biggest problems people get with mobile phone service operators is network coverage. Once under contract, you can’t really get out of it, even if network coverage is pretty poor. It’s a bad place to be – you can’t cancel, and you can’t even enjoy your monthly allowance of calls and text because of bad service. The only way to ensure you don’t fall into this trap is to scrutinize the reputation of your provider. You don’t have to look far – just go to their social media sites and look for comments. People will always be vocal about bad service.

Contract Length

If you can, look for a mobile phone contract with a short duration. Once you’re free from a service provider, you can do whatever you wish with your phone and not have to worry about termination fines. The only problem with a short contract length is that the monthly payments are higher. Remember that the total cost of the handset you’re getting is divided by your contract length. However, if you can handle the extra cost, a short contract length is always a good thing.

Monthly Allowances

This part is purely subjective. Every person has different preferences and your monthly plan should complement your lifestyle. Think about your usage patterns – do you tend to text more, or do you prefer to call people? Do you use mobile Internet a lot? Be picky with monthly plans. It’s okay to negotiate and try to get the plan that you know you’ll use to the fullest.

Fines and Penalties

After knowing your monthly limits, the next step is to find out what happens when you go past your limits. Not everyone can stay on top of their mobile phone bills. Not everyone can meticulously budget their calls and texts for the month. There will be times when you go past your limit or forget to pay your bills on time. You need to find out what the consequences are in case of late payments, excess usage, as well as early cancellation.

Are Bad Credit Mobile Phone Contracts Really Guaranteed?

Mobile phone contracts are said to be a great option for people who are financially struggling. Because of its set monthly limit, you can budget your expenses wisely if you are carefully. However, not only are mobile phone contracts economical, they are now the best option for people with bad credit.

Bad credit is proof that in your past, you have neglected a financial responsibility. Whether it be an unpaid loan or overdue credit card bills, bad credit is definitely a black stain on your reputation. Lenders, insurance, and service providers tend to veer away from bad credit clients because they are thought to be unreliable. So would bad credit mobile phones change that?

If you search online, you’ll see a lot of services offering guaranteed bad credit mobile phone contracts. This means that your application will be accepted regardless of your credit score. Are these deals too good to be true? Let’s find out.

No Credit Checks

Upon closer inspection, bad credit mobile phone contract providers seem to care less about your past financial mistakes, and focus on your present ability to pay. So as long as you have income, these providers will consider your application. Some providers do perform credit checks, but have extremely lenient procedures. More than anything, they conduct the credit check to see which handsets can be given to which clients.

Security Measures

A word of caution though, nothing is ever without a catch. Yes, bad credit mobile phones do not care about your credit rating, but of course a business is still a business. Providers still need to protect themselves in case you run away from your monthly payments.

One thing that we’ve observed with bad credit mobile phone providers is that some ask for an initial deposit. This definitely lowers the risk factor on the provider’s side. The initial deposit varies depending on how new your chosen handset is. For old models, a deposit may not even be required.

Keep in mind that this is not an easy solution. Providers are still hesitant to hand over new handphones to people with bad credit rating. If you really want a guaranteed “yes” on your application, then go for an older handset.

Also, be prepared for extremely basic monthly plans. Of course, they won’t give out unlimited calls and texts to bad credit clients freely. It would be commercial suicide.

How To Get Around It

If you simply want an old handset to use for your communication needs, the offers provided by bad credit mobile phone providers might be okay. However, if you want the newest handsets and feature-loaded monthly plans, you might need to wait a while. Start with the lowest plans and average handsets, and then gradually work your way up. Trade-ins and upgrades are a natural feature of mobile phone contracts and bad credit mobile plans are not exempted. Give it a few months; pay your bills on time and they might start trusting you enough to give you options for the latest handsets and better monthly limits.

Finding Bad Credit Mobile Phone Deals

If you’re having trouble looking for the best and cheapest bad credit mobile phone deals, there are a lot of services on the web that do the searching for you. Services like PhonesForAll cater to clients with bad credit rating. Give these sites a try and they’ll match you with providers who can give you guaranteed mobile phone contracts.

Pros and Cons of Mobile Phone Contracts

There are several mobile phone network providers in the UK, and each one has a plethora of deals and offers for consumers of all demographics. However, most mobile phone services can be cut down into two major types: prepaid or contract. While prepaid or pay-as-you-go services are popular with the younger crowd, the allure of mobile phone contracts hasn’t wavered.

Mobile phone contracts are definitely controversial, with both devout advocates and naysayers. If you are currently using a pay-as-you-go plan or are planning to buy a phone for the first time, you might wonder whether mobile phone contracts are right for you. To help you with this decision, we’ve compiled a short list of pros and cons for both sides of the argument.

Pros

A set bill per month. This is great for people who want to budget their mobile phone spending.
Great for emergencies. If you run out of prepaid credits in PAYG plans, you won’t be able to use your mobile phone until you top-up more credits. With mobile phone contracts, even if you reach your monthly limit, you can make emergency calls and text for a price.
Cheaper purchase price of any handset you wish. Since mobile phone contracts will divide the total cost of the handset into your monthly payments, you can gradually pay off the handset instead of buying it outright. This is a good option if you don’t have enough money to buy the phone you want.
Additional benefits. There are certain benefits that only contract clients enjoy. Mobile providers often give discounts and freebies for third-party partner establishments like fast food, clothes, accessories and others.
Easy upgrade options. Once you are in a contract with a certain mobile phone provider, there will be opportunities for trade-ins or upgrades. You can increase the limit of your monthly calls and texts, or even trade-in your old handset for a new one.

Cons

Higher total purchase price. Although you can get that handset you’ve always wanted without buying it outright, the total cost that you would have to pay for the handset while under contract will always be higher than if you bought the handset outright.
Lock-in periods. You cannot cancel your plan while under contract. If you choose to do so, you’ll have to pay penalties and fees. Even if you find yourself disappointed with your plan, there’s no way to get out of it completely. While you may negotiate terms with your provider, an outright cancellation without any consequences is impossible.
Penalties and Fines. Yes, you’ll never run out of call minutes and texts even if you’ve already exhausted your limit. However, most providers don’t automatically shut off your usage capacity even after reaching the monthly limit. Any excess calls, texts and data minutes will be charged accordingly. Late payments will incur a penalty as well.

Verdict

To be honest, there’s no perfect option as both PAYG and mobile phone contracts have both good and bad sides. However, if you would like to control your spending and can’t afford to buy a phone outright, mobile phone contracts are your best bet.