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1 October 2020

Getting the best contract phone deal

Mobile phone contract deals provide you with a new mobile, plus a monthly allowance of minutes, texts and data. Here's how to pick the perfect plan.
Gettingthebestcontractphonedeal 447327
Hamse Yusuf

Contract deals - otherwise known as pay-monthly phone deals - are a great way to get hold of the latest smartphone and pay off the expense in installments. 

Deciding whether this is the best option for you is based on a range of factors, including the smartphone you're looking to include in the contract, the bundle being offered, and any extras you're getting as part of the deal.

Read on to find out if a contract phone is the best choice for your next purchase. 

Looking for a new mobile? Pick from our Best Buy smartphones.

What are the advantages of monthly contract deals?

  • Free/cheap phones - with a monthly contract, you'll get a wide choice of free or subsidised mobile phone handsets, ideal if you fancy an upgrade.
  • Good value - paying in advance for a fixed amount of minutes, texts and data can be much cheaper than topping up a pay as you go phone.
  • Hassle free - you’ll never get cut off because you’ve forgotten to top up your credit.
  • Can build your credit score - Paying off a mobile phone contract monthly can be a good way to build your credit score. Bear in mind that missed payments or defaulting can make your credit score drop sharply.

Is a monthly contract deal right for me?

Pay-monthly deals are a great choice if you want the latest smartphone. Instead of paying hundreds of pounds for a pay-as-you-go or SIM-free version, you can usually get a shiny new mobile on a monthly deal with either no upfront fee or a very small one-off cost. This is certainly the cheapest way to grab a newly released smartphone.

 But if you're the sort of phone owner who is a casual mobile phone user, you’re probably better off on a pay-as-you-go (PAYG) or SIM-only plan.

Our tough lab tests separate the best mobile phones from the worst. Find out which phone is best for you - see our mobile phone reviews.

How do monthly contract deals work?

With a monthly mobile contract, you usually sign up to a deal lasting 12 or 24 months. Nowadays, most contracts last for two years. You'll pay a lower premium with a longer contract and are likely to pay a reduced sum for the handset itself, or even get it free of charge.

It's worth noting that you'll need to pass a credit check and be over 18 to take out a monthly contract. Once that's sorted, you'll pay a fixed amount each month, and in return you'll get the phone of your choice and a set number of minutes, texts and data to use. Don't be afraid to haggle when you're trying to secure a new phone contract, because doing so can save you money. You may be able to cancel your mobile contract early, but this will likely result in a early cancellation fee.

Services such as O2 Refresh will split your bill into two parts. While the Device Plan covers the cost of your phone, the Airtime Plan covers the cost of data, texts and minutes. On O2 Refresh, you can trade in your device and put the money towards paying off your Device Plan. If you want to upgrade to the latest smartphone, you'll have to pay off your Device Plan.

Which network should I choose?

Most mobile phone networks offer pay-monthly deals that come with a phone, although Asda Mobile is an example of a mobile network provider which offers only pay-as-you-go and SIM-only packages.

Vodafone currently offers a 30-day network guarantee, which gives customers around four weeks to try out its service 'with no strings attached'. This means you can put its network strength to the test before you commit to a long-term contract. Find out what Vodafone's customers think of it - see our Vodafone mobile review.

Picking the right network is extremely important – get it wrong and you could be stuck with it for two years. To help you choose the right network for you, every year we ask thousands of mobile phone customers what they think of their provider. This survey is the largest of its kind in the UK - to see the results, go to best mobile networks

What about mobile network coverage?

Before you sign up to a new network, you should check the network coverage in your area to make sure you’ll be able to get a good signal. Coverage can be patchy, especially on 4G. 

To find out what the phone signal is like where you live, you can use our mobile phone coverage map - it's based on millions of readings from real mobile phone users. To learn the average data upload and download speeds in your area, see our interactive mobile phone coverage map.

What else do I need to consider?

To find the best pay-monthly phone deal for you, thinking about how you use your phone is crucial. Have a look at your previous mobile bills as a guide, and try to find a deal that matches your typical usage. Remember - the cost of calls, texts and data that exceed your inclusive minutes can add up.

Be aware that while most networks will let you move to a more expensive package during your contract (although this may mean you have to sign up for a further 12, 18 or 24 months), few will let you move to a cheaper one if you’re not using your monthly allowance.

Are there any drawbacks with pay-monthly deals?

Pay-monthly deals can result in nasty bills – something that regulator Ofcom has termed ‘bill shock’. With pay-as-you-go deals, you can spend only as much as your credit allows. However, there's no such limit with a pay-monthly tariff. Instead, you’re usually free to spend any amount, which the network will then automatically transfer from your bank account via direct debit.

If you’re worried about bill shock, ask your network provider if it will let you set a monthly cap on your spending. Most won’t but some, such as Tesco Mobile, are happy to do so.

If you've decided that a pay-monthly deal is right for you, then your next step is to pick the right smartphone. Find the best mobile phone for you - see our mobile phone reviews.

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