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When it comes to buying a new phone, especially a top of the range smartphone, you know that you are making a big financial commitment. Either you are faced with paying a large lump sum for your handset before even considering the cost of your SIM contract, or you are looking at a hefty monthly bill dividing the cost of the phone over a prescribed period. For most of us going without a phone is not an option, so what is the best choice for you, phone contract or sim only contract?
Pros of SIM Only contract
Once you have bought the phone it is yours outright, and your monthly cost will be a greatly reduced when you are only paying for your SIM package.
You can choose between a better variety of SIM packages, not just the ones that also comes with the phone.
A lot of phone companies now offer SIM only contracts that do not have a time commitment, so you can cancel at any time.
Pros of phone contract
You don't have to save up a large lump sum in advance in order to afford your phone
Once the phone is paid off you will usually get a reminder from your provider that you are now entitled to a new phone as part of your monthly cost. If you are used to the larger monthly direct debit, you will get a new phone without feeling the impact of having to pay out a large lump sum to get it.
if you looking at the pros of each option hasn't helped you to make up your mind here are a few extra tips to make sure you get the best deal:
1) Do the maths
Add the cost of your handset to your SIM only package over the period it would take you to pay off a phone on a phone contract. Chances are that you will pay less by going with the SIM Only option, however you should weigh up whether it is more important to have some savings while paying a little extra on the overall cost of your phone, or whether it is more financially viable for you to pay for the phone outright.
2) Shop around
There can be a huge difference in overall price between different phone companies, so shop around. Make sure that you look out for any additional costs beyond your monthly bill. Many companies will still charge a downpayment on a phone even as part of a monthly phone repayment scheme. Whether you are going for contract or sim only make sure you check the charges you may face if you go over your minutes, texts or data. Differences here can be substantial.
If you are going to go for a sim only deal then don't automatically buy your phone off the same company you are getting your sim from. Buying the phone from a different store than the sim might make quite a substantial difference to your wallet.