Helping you choose a mobile phone contract


By James Smith

Mobile devices might be the most important piece of technology that we interact with on a day-to-day basis and there is no doubting they are the defining communication tool of recent years, however the contracts that come attached are complex and can be tricky, to say the least. Here's our simple guide for helping you find the best possible contract and avoid common pitfalls and traps. As with payday loans and indeed any type of loans, knowledge is power, so make sure you have done your homework before you commit pen to paper! Despite best efforts you may end up with a contract that you want to get out of and we will explore the ways and means of attempting that.

Avoiding the issue is always a lot better than trying to fix a problem so hopefully we can help steer you towards the right contract. One that is suitable for your needs and most importantly suitable for your budget.

With so much choice out there, peppered with confusing jargon and complex pricing tariffs, it can be overwhelming. There are a number of things to look out for when you are searching for a suitable phone deal to help ensure that you get the right one for your needs.


As a responsible direct lender of payday loans, 247Moneybox is committed to responsible lending, and as with payday loans, one of the most important things that you will need to consider is the monthly cost of your contract. You need to ensure that you find a competitive deal with an affordable monthly cost but also make sure you consider those pesky extras, such as insurance or roaming charges. Looking for a package that suits your lifestyle and budget is of paramount importance. As with any debt repayments, such as repaying payday loans online, you need to make sure it fits in with your budget.

With ever increasing functionality of phones, phablets, tablets and so on, the cost of these devices has skyrocketed. As a result, the contract offered with the top handsets have to go a long way to cover the cost of device itself. Ask yourself do you really need the latest and greatest tech? Some older or less powerful phones are offered at a much lower cost or are even free. Keep your eyes peeled for special offers on the mid-range phones on the market, and you could enjoy the balance between sporting the latest hi-tech phone and getting a great deal on your contract.

Offers on calls texts and data

The world of mobile devices is varied and wonderful but also highly competitive. In order to entice new customers many providers offer special deals on data allowances, free texts and call bundles. Look out for these packages and find one that suits your mobile needs, as getting the right one could save you a packet each month.

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The contract term

As with any other type of contract, getting tied into in for too long can compound a bad move and leads to some serious stress. Often breaking these tie-ins is cost prohibitive and the only thing to do is attempt to sell the remaining term to someone else (if indeed that is possible) or just suck it up. Equally frustrating with fast moving technology, is to get left behind as pricing terms change rapidly leaving you out of pocket. As a result the top tip is to try not to sign up to an excessively long term wherever possible, as this could ultimately end up costing you when you could be switching over to a better deal or more suitable package with another provider.

Transferring information

So, you've bought your new device and you want to get it going asap. The last thing that you want is the hassle associated with transferring your existing number and data. If you are changing networks you will have to contact your current provider to port your existing number to the new network. However don't fear, there is a well-established process for this. A further challenge in recent times has been changing operating systems. Both the major operators in the market now offer a cloud based app that allows you to transfer all your data, photos, files and contacts easily and seamlessly.

Choosing the right network provider

Now this is a tough ask. You should consider what you are going to use your device for in the main as some networks target different types of users and so will offer their best deals to that section of the population. For example, a business user may not need loads of data but may need unlimited international calls. Whereas a millennial leisure user may rarely make any calls or text but need loads of data to stream music and videos. It may be obvious but you should make sure to find out which network provider offers the best signal strength and coverage for your area before you make any commitment.

Check out the regulator's website

Before you commit to any particular network or package, it is worth checking the Ofcom website. Ofcom regulates mobile phone services and providers. Here you can learn more about the networks that offer the best coverage for your area, as well as other relevant information on related telecommunication services, such as broadband speeds.

Consider whether you may be better with prepaid

The suitability of a contract wіll be largely dependent on your needs and when you tend to use the device, as well as how often you use it. Some people, such as those that only use the device rarely and those with bad credit may find they are better off or restricted to a pay as you go (PAYG) contract. This may sound like a bad thing but actually it does have it benefits for different groups:

PAYG is a great option for a first mobile. First time users, mainly kids, can get a gentle introduction to a very adult concept - that of credit. This is a valuable life lesson. The upside that it's in a controlled environment. You can have peace of mind that you are not going to get a "bill shock" from a crazy amount of video watching!

Teens love to feel grown up and with the handsets that are now available on PAYG they get all the upside of a contract package but one that you can control and get them used to making real life decisions. Being connected to friends and with the outside world is a vital educational tool. Just one that won't break the bank.

Off to uni, embarking on a gap year, or starting their first job, PAYG offers the youth great value for money and ability to budget. All of these life milestones are rich in opportunity and promise. Protecting this group from potentially harmful traps whilst not restricting their freedom is incredibly important. PAYG with inclusive data offers a superb alternative to long, committed contracts.

Predicting the future is not an easy task. Perhaps you are self-employed with an uneven cashflow. Couple this with busy lives, kids and responsibilities and committing to a lengthy contract might not be right for you. PAYG gives freedom to use your device as much or as little as your budget allows. Remember to keep an eye on any minimum monthly top-ups to keep your phone activated. Stay in control and you won't be faced with having to settle large bills with limited cash.

Stay in touch, get online and be an active savvy pensioner. With mobile technology becoming meritocratic don't get left behind, however it's natural to feel a little overwhelmed or sceptical. A PAYG is a great way to test the water and see if, and how much, you like using a phone. Once you feel more comfortable then a contract may be the right option or maybe it's best to continue to prepay upfront and stay in control.

Credit checks and contract

It's common knowledge that network providers and mobile phone companies will typically run a credit check on the individual who is applying for a contract phone. This is because the provider is effectively letting you pay your handset off over time and also allowing you to run up costs before paying the bill later i.e. in arrears. This carries a degree of risk. This may mean that if you have bad or poor credit that you might not be able to get a contract just as you may not expect to be approved for credit such as a payday loan.

Thinking of a mobile phone contract as a loan is actually a good way of going about things. A credit score assesses the customer's credit rating and determines whether they are likely to be able to pay, whether that be a loan repayment or a phone bill. In that sense then, a mobile phone network could be thought of as a lender in the same way that we here at 247Moneybox are provider of payday loans. We both make an affordability judgement call, price for risk and then wait to see if our models are correct.

There are many different contract deals on offer out there today and in order to find the best one you need to compare. This means looking at the bigger picture and not just one aspect, so compare everything from the price, to the free minutes, data and texts, and make sure that you know exactly what is included in the package.

Now that we have established that the provider is taking a risk there are things you can do to help you get accepted.

Tip 1: apply with the mobile phone network directly

Using a middle man such as a high street mobile phone dealer could prove more difficult as often the networks set them stricter acceptance criteria to manage their risk. Going directly to the network may allow for a greater leeway in assessing your risk. It may also be that the network can accept a higher risk as they are not paying out commission to a middleman.

Tip 2: apply for a low-end handset on a low-end monthly tariff

As mentioned above, reduce the risk to the provider and they can pass that on to you. If you think that you might not be able to qualify for a low rate loan for example then it's probably a good idea to not go for the latest handset. Why we hear you ask? Well that's down to how lenders and credit providers look at credit reports. The more searches and the more declines a reader sees on a credit report the generally more negative score they assign. So, top tip, limit your applications to where you are pretty confident of being accepted.

Tip 3: apply for a sim-only contract

Another idea that might help you get a contract is to apply for a "sim-only" deal. These are basically just the network and package part of the deal rather than the handset. Sim card tariffs are packed with great value options such as more free calls or data allowances. This is because there is less risk to the networks as there is no subsidy required for the cost of a handset. An additional advantage of these types of contracts is the fact that most of them come with a 30-day rolling contract which means that there is more, flexibility as you are not tied into a 12, 18 or 24-month contract.

Following the three tips shown above, may increase your chances for approval. However, it may well be the case that a contract is not for you. For example, you may only be in the UK for a short period of time, for example you travel for work frequently. Getting a pay as you go deal may well, in this scenario, work out better for you.

Factor in all costs

Many people base their decision to take on a contract phone on the cost of the baseline monthly cost alone. On first glance the monthly contract cost may not seem too expensive. However, when you add on other costs, such as out-of-package call charges, insurance, etc., this can quickly add up. To ensure that you don't end up paying a monthly rental for a phone that you cannot actually afford to use, factor in all of the potential costs before you make your decision.

In addition to the above, consider the following to cut those bills:

If you buy a lower-end more economical handset, not only will it be far more competitively priced than top-of-the-range models that are included in many contracts, but it will cut your insurance premium too (if you choose to take that out). Remember, these phones are not free and someone is paying for it! So the monthly repayments may seem reasonable but take a look at the term or the call charges particularly things like out-of-package charges. This maybe where the network is recouping some of the handset cost.

Most networks offer an alert service that lets you know how much you are spending. This can be helpful when budgeting. Some providers will let you set a hard cap meaning that if you set a ceiling you will stick to it!

Joining the network the majority of your contacts use is a smart move as often networks discount in network interaction to encourage a network effect. We've seen this feature declining in the UK of late, most probably driven by competition issues.

Your service provider will, most probably, be able to opt you out of making calls to premium services. By selecting this service you will be unable to make these types of calls without reversing the opt out but it should make sticking to a budget much easier.

Is it possible to get out of a mobile phone contract?

As with most contracts, you have an obligation to remain in the contract for the full term. Look closely at the fine print before you sign, to see what the termination clauses say. There may be a penalty to compensate the network provider for the lost revenue. This could be quite a lot of cash if you decide to rescind the contract shorty after signing, so watch out. In addition, whilst you are checking the details, see if your provider has perhaps slid in some optional charges that you can opt of and save money either organising it yourself, such as insurance, or that you decide you don't need, like an emergency 24 hour replacement phone couriered out to you.

We have also heard of some networks who try to vary the contract and move you on to a new pricing plan during the term of the contract. This is sneaky and if you look at the contract they will have built in a right to vary. However, the trigger to vary the contract is usually in your control such as missing a payment, so as long as you stick to your side of the contract, then all should be fine and you will pay the rate that you signed up to.

Finally, if you think that you have been missold in anyway due to false or misleading advertising, then you have rights that all parties must honour. In the UK, you can look to the Ombudsman service. However do bear in mind that you should take your complaint in the first instance to the service provider to resolve.


If you do your homework and arm yourself with all the available information when selecting your contract then, fingers crossed, you should not run into any problems. If you do, don't panic and work with your provider to reach a mutually agreeable solution or failing that seek independent advice. Good luck and let us know how you get on by contacting us across our social media sites.