* This is a collaborative post.
For many people a smartphone is practically a necessity. But it can quickly become a very expensive one. Costly contracts, insurance for multiple phones and the hidden costs of roaming and in-app purchases can all drive up the monthly bill. Fortunately there are plenty of ways to save money, even if you’re currently locked into a contract.
Do Your Research
Research is essential. You know that, otherwise you wouldn’t be here. Too many of us walk into the nearest phone shop and buy the shiniest handset we see. Good: you can now take professional quality photographs of your children. Bad: you’re paying a premium for it.
It’s really important that you do plenty of research before you even step into that phone shop. First, find the handset you want. Then, work out if it’s cheaper to buy it outright now, or pay for it over a 24-month contract (more on that later). Use multiple comparison sites to shop around and find the best deal for you.
It’s often cheaper to take out a contract over the phone or online. Customer services can offer better deals than in-store assistants. Before you phone your network provider, find the very best price for the contract and handset you want. Explain that you’ve found a great deal elsewhere and see if they’ll match it. Most networks will do what they can to retain you, so you’ll likely get a good price.
Research is empowering so don’t make any decisions without doing some first.
Is Pay As You Go (PAYG) Better for You?
Contracts are considered better value than PAYG because you often get lots of ‘freebies’ – minutes and data at very low costs. However, if you’re not going to use those additional minutes, texts or data, you’re not actually saving money.
However, for heavy users, a contract or SIM-only will almost certainly work out cheaper.
For very light users, a PAYG tariff is almost always the cheaper option. You can either buy a monthly bundle that gets you a set number of minutes, texts and data or pay for every call, text or byte of data you use out of your allowance, but you onlypay for that. You’re not paying for additional features you may never use. This consumer guide has reviewed all the current PAYG options on offer with giffgaff getting their recommendation.
SIM-Only Offers Lower Monthly Costs
If you’ve decided PAYG isn’t for you, your next step is to choose between SIM-only and a monthly contract.
A monthly contract includes the cost of the handset. So while you may pay nothing upfront for the latest model, you do pay for the phone eventually, and often at an inflated cost. The cost of the phone is factored into the monthly payment, which is why SIM-only is almost always cheaper.
If you currently have a working phone that does everything you need it to do, opting for SIM-only will certainly save you hundreds of pounds. The cheapest SIM-only contracts are £7.50 a month. In addition, you can choose a contract-free deal, which means you’re not locked in if your needs change.
Alternatively, if you have your eye on a particular model, it may well be cheaper to buy it up-front and choose a SIM-only deal. This isn’t always the case, so be sure to do your research first.
Don’t Pay for More than You Use
According to research by billmonitor.com, only 30% of people on contracts use their full minute and text allowances. In addition, eight out of ten people are on the wrong mobile phone tariff. There’s a very strong chance that you are too, which means you could be paying hundreds more than you need to every year.
This is easily fixed by getting to know your usage requirements. Check past bills to see exactly how many texts, minutes and MB of data you use each month. Then use this information to ensure you get a tariff that best reflects your needs. Be sure to do this for everyone in the household, so you can save money on every bill.
To find the best deal for you or a family member, use a website like billmonitor.com. Simply input your usage and the site cuts through the noise of thousands of deals and offers to find the best twelve for you. You can then use this information to swap to a new network/tariff entirely, or negotiate your current one.
Ask for a Downgrade
Very few people are aware of this fact, but you can negotiate your tariff whilst still in contract. So there’s absolutely no reason to wait until your contracts up to find out if you can save money.
If you’ve been with a network for more than 3 months, some (not all) providers will let you downgrade to a lower tariff. Alternatively, if you find yourself using more than your monthly allowance and incurring extra costs, you may be able to renegotiate a better package and save money there.
Whatever your situation, be sure to call your provider’s customer service department for a bill review. They may be able to help you find something cheaper.
Stay or Switch?
If your contract is coming to an end you are in the best position possible to negotiate a good deal. Your current supplier will be desperate to keep you, other suppliers desperate to gain you… arm yourself with knowledge of the best deals and you’ll save yourself hundreds.
First, call your network provider before the end of your contract. Don’t pay for the handset any longer than you need to (you’ll be surprised how many people do this). Find out the best deal they can offer, whether contract or SIM-only, and warn them you may switch. This is their one chance to keep you, so suggesting you’ve found a better deal elsewhere – especially if you have the facts to back it up – might make them rethink their offers.
Never take the first deal you’re offered, always do your research, and don’t sign up for more data or texts and minutes than you need.