A simples guide

SIM only vs. contract phone packages

Remember when a mobile phone was a brick with a dial tone? Phones have come a long way since then with 93% of us living in the UK now using a smartphone. At the back end of 2015, we made just under 37 billion minutes of calls and sent 25 billion messages – phew! But in-between making all those calls and sending messages have you ever stopped to think whether you could be saving money on your current phone deal? Well, now’s the time to listen up, because you might want to hear this.


What types of tariffs are there?

We all love a deal, but SIM only, PAYG, contract – what does it all mean? So let’s get some things cleared up first; SIM stands for ‘subscriber identification module’ – you can see why it’s been shortened. It’s the card inside your mobile phone that stores data and makes your phone work, connecting it to your network.

PAYG stands for ‘pay as you go’ which works exactly as you’d imagine, you pay only for your usage and top up as and when you need more credit. Useful if you want to manage your costs and don’t use your phone very often.

A SIM only deal is where you get the SIM but not a handset. You’ll usually get a bundle of minutes for calls, texts and a data allowance for a monthly fee. Useful if you already have a phone but want a better price for data, texts and minutes.

A pay monthly contract deal is where you’re tied into an agreement for a certain amount of time, possibly for 12 months but usually 18 or 24 months and pay a fixed fee every month. In return you get a handset and a certain amount of texts, calls and data access each month. Useful if you want the latest phone.

Which one’s right for me?

What package will work for you depends on how much you use your phone and to an extent, what you use it for. A pay as you go might suit you if you don’t send many texts or make many calls.

But if you’re one of the 53% of people who check their smartphones five minutes after waking up in the morning, chances are you might be better off with a SIM only or contract package – to decide on which one, you’ll need to look at the pros and cons.

phone and laptop

SIM only pros

• You’re free to choose – well, after about a month that is. Most SIM only deals mean you’re not tied to any one provider and some contracts are as short as 30 days so if you don’t like it – you can swap. As long as you give notice as agreed in any T&Cs you’ve got then you won’t be charged to change.

• It could cost less – SIM only deals tend to be cheaper in the long run compared to contract agreements because you’re not paying back the cost of a handset.

• Or stick with your old phone – if you’re particularly attached to your old phone you can keep it, just pop in your new SIM (you might need to unlock your phone first) and away you go.

• Less rigorous credit check – your credit history will still be checked out but the criteria you’ll have to meet aren’t so comprehensive compared to a contract deal.


SIM only cons

• Handsets are pricey – the cost of a phone on its own can roll into hundreds, especially if you like your phones loaded up with a geek fest of features.

• Are you locked in? – you may find you need to unlock your phone if it’s tied to a network provider that’s different from your SIM provider.

Contract deal pros

• Free handset – although technically it’s not really free, you’re paying for it in your monthly fee. Either way it’s a useful method of getting the latest smartphone at a more manageable price.

• Hassle free – you know what you’re getting with a contract and even if you run over your allowance you won’t get cut off and you won’t have to remember to top up your credit.

• Free gifts – Some will offer free gifts. Always a winner and depending on the gift this might be a clincher. Gifts vary but think along the lines of phone accessories like hands free headsets, you might even get deals with free access to digital music services.


Contract deal cons

• Shackled – you’re tied into a particular network provider, potentially for up to two years, which is a long time if reception is poor where you live or you’re itching for a new phone.

• Credit check – you’ll undergo a check on your credit history and if it’s not so glorious, a contract deal may not be on the cards for you.

• Exceeding your allowance – you may not have to worry about running out of minutes but if you go over your allowance you’ll be hit hard with high charges.

Finding a deal

So now that you’re a mastermind of mobile phone info you can start using our mobile comparison service for something that suits you. You can even filter your results to really hone in on what it is you’re looking for. Finding the best deal for you has never been easier.