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SIM Only vs. Phone Contracts – Understand Them and Choose the One which is the Best for Your Needs

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93% of the UK population using a smartphoneGone are the days when mobile phones used to be like bricks with a random dial tone. Since then phones have come a long way with 93% of the UK population using a smartphone. As many as 37 billion minutes of calls and 25 billion messages have been recorded during last few years. However, while making all those calls and sending messages, have you ever thought whether you could save on your existing phone deal? Well, it might interest you that you can do so.

Upon buying a new 3G or 4G phone, the buyer is always confused because there are two options available and it can’t be easily determined which of them is the better one. The first of the two options is that you can get a SIM to put in your new phone and the second option is that you sign up a contract over your new handset. You’ll have to know some factors to decide which one you should opt for.

What’s the Difference?

To compare SIM only vs. phone contracts it’s better to understand what is what. When you sign a pay monthly mobile phone contract, you’re bound by a contract for a set period of time, probably for 12 months, but often 18 or 24 months and you have to pay a set amount as a fee every month. You then get a handset and a set amount of calls, texts and data access every month. There is a very small amount, if at all, to pay in advance when you sign up; however, your monthly bill will consist of your mobile tariff as well as payments on your handset. This deal is useful when you want the latest phone.

phone contract

A SIM-only deal on the other hand covers only your mobile service. SIM is the short form for ‘subscriber identification module’. It’s the card inside your device on which data is stored and it overall makes your phone work, by connecting it to the network you’ve chosen. In a SIM-only deal, you get only the SIM but not a handset. It offers you a package of minutes for calls, texts and a data allowance for a monthly fee. You pay for using your SIM only, as suggested by the name. This is useful when you already have a handset but want the minutes of calls, data and texts for a better price. Several people opt for buying their phone outright and then buy a SIM-only plan to get a mobile tariff. This way the monthly payment becomes much less, but you have to pay a lot initially.

various SIM cards

to get the best deal while buying a 3G or 4G phone, you have to find which package is perfect for you, you have to check how much the usage of your phone is and to a certain extent, what you use your phone for. E.g. a pay as you go deal might be right for you if don’t make many calls or don’t send many text messages.

However, if you are one of the 53% of phone users who are in a habit of checking their smartphones five minutes upon getting up in the morning, you are highly likely to be better off with a contract or SIM-only package. To decide between the two, you have to consider their advantages and disadvantages.

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various SIM cards

Advantages of SIM-only

 It’s overall cheaper of the two because you don’t have to pay back the cost of the phone
 You have to pay less per month
 There is no or less commitment because you are not locked by a 2-year contract, so, you have more freedom over when to change your allowance and phone
 You will have an unlocked handset; therefore you are free to choose whichever network you want
 You can get into the deal without a rigorous credit check. There will be a checking of your credit history but the criteria you need to meet won’t be as comprehensive as that of a contract deal.
 This is the only option to get a pay-as-you-go plan. Pay-as-you-go or PAYG allows you to pay only for your usage and you can top up whenever you need more credit. This is useful when you are keen to manage your costs and have no heavy usage of phone.

SIM card

Disadvantages of SIM-only

 The price of the handset can go into hundreds, particularly if it’s feature-loaded.
 You may have to unlock your phone if it’s linked to a network provider that is different than your SIM provider.

Advantages of Phone Contracts

 You’ve to pay very little in advance; you can even get into contracts with a ‘free’ phone. While technically it’s not actually ‘free’, you will be paying for it in your monthly payment. Thus, it’s a great way to get the latest smartphone at a cost that you can manage easily (because they are spread out).
 You can get your hands on your phone directly, without needing to save up upfront, which means you can have the ultimate best piece
 Even if you go out of your allowance, your connection won’t be cut off; so, you don’t have to remember every time to top up your credit.
 If you choose a good deal, it isn’t much costlier than purchasing outright and getting SIM-only
 Getting into contracts means you can have a new phone every two years
 Some contract phone deals offer free gifts which vary but you can get phone accessories like hands-free headsets or a phone cover. You can even get free access to digital music services.

using a mobile phone

Disadvantages of Phone Contracts

 You have to be tied up with a specific network provider, possible for up to two years which may be quite a long time for you if the service is poor where you live or you are longing for a new phone.
 You’ll have to face a rigorous credit check and if your credit history is not very good, you may not get into a contract package.
 You need not worry about running over minutes but will have to be concerned about going short of your allowance because then you’ll have to pay high charges

Thus, as now you are aware of both the types, you can easily compare between SIM only and phone contracts for your 3G or 4G phone, and find which one is the best for your needs.


using a mobile phone

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