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Comparing Pay Monthly And Pay-as-you-go For Mobile Phones

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With the vast range of ways to pay for your mobile phone, understanding which one will suit you best and offer the right tariff for your needs can be difficult. Two main tariff charge methods offered by network providers are either to sign a contract for an agreed period for which you pay a monthly set fee, or to pay-as-you-go for the use of your mobile where you top-up your cash amount when it runs out.

The following guide will explore these two options, so that you can decide which one will match your individual lifestyle and usage habits.

Pay Monthly Phones

The advantages of a pay monthly mobile contract are:

- You are given a choice of phone to go with the contract you sign up for. Once the contract expires, the phone is owned by you outright. This is a major bonus for many people, since paying for the latest mobile phone all in one go is a big dent to the bank balance.

- You will receive an agreed amount of free services included in your contract package. If you choose the contract that matches your usage habits, this will give you great value for money.

-If you go over your free ...
... minutes and texts, the extra fee will simply be added to your contract amount at the end of the month, meaning unlike pay-as-you-go, there is the added security of knowing you will never run out of call time.

Pay-As-You-Go Phones

This mobile payment option is popular amongst people who either don't use their phones extensively, or who don't want to be tied into a lengthy contract. The advantages of pay-as-you-go are:

- You will only be charged for the actual calls you make, there is no monthly line rental fee as with pay monthly contracts. While this can be the cheapest choice, if you use your mobile alot then a contract could be more suitable since it offers a certain amount of monthly free call minutes and other services.

- There is no binding contract, leaving you free of responsibility and able to take advantage of any new deals that become available on the marketplace.

- You will simply register your phone with a network provider and top-up as you like, there is no credit check needed as with pay monthly contracts.

Is Pre-paid or Pay Monthly Best for You?

Your choice of phone package comes down to your particular usage habits, so it's crucial to understand them. On average, the actual cost per minute for calls and texts on pay-as-you-go deals is often higher than on a pay monthly contract. That being said, if you don't use all the services included free in your pay monthly fee, you could be throwing away your money. For example, research conducted by Omio.com showed that as many as 47% of those surveyed on monthly contracts made use of less than half of their free minutes and texts. It also revealed that 82% admitted they never even got close to using their allowed monthly amounts.

The main thing is to be realistic - if you're a light user, which generally qualifies as spending only £15 or less each month on your mobile, then pay-as-you-go will be the cheapest choice. If however you tend to use your phone alot, then you can end up saving a significant amount of money by signing up for a contract. The latter will also entitle you to have a new mobile phone every time your contract is up for renewal.

Once you've decided whether pay-as-you-go or pay monthly phones are the most suitable option for your needs, the second most important factor in finding the best tariff is to shop around and compare the range of network provider offers. Since there is a wealth of new deals constantly being introduced in the highly competitive mobile marketplace, with thorough research you are sure to find a package that will be a hand-to-glove fit.
Peter Williams is a mobile communications consultant and retailer of pay monthly phones.

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