Your guide to buying a mobile phone 

We currently live in a world where mobile phones seem like a necessity rather than a luxury. When they were first invented back in 1973, the sole purpose was to make calls, but now they can do just about everything. But as phones have become more like mini computers, the prices have rocketed and it’s not as simple as paying for a mobile phone tariff.

In this guide, we provide information on the types of phones, tariffs and deals out there and how to switch mobile phone provider.

Ways of buying a mobile phone

Contract

A contract is one of the most popular ways to purchase a phone. Customers pay a monthly price for a fixed amount of time, usually 12 or 24 months in exchange for a handset which comes with minutes, texts and mobile data (4G). When you opt in to purchasing a phone contract, you can select the number of minutes, texts and data that you need.

What are the benefits of a phone contract?

If you’re looking to buy a new phone contract but not sure how it would benefit you, have a read below:

Endless choices

With a phone contract, you can pretty much get any phone you want, so start off by thinking about what you want your phone for. If you just need a phone to make calls or send texts, you won’t necessary want to spend hundreds of pounds a year on a smartphone that can do everything! If you are looking for a phone that gives you more such as access to music, films, apps, internet etc… you may want to compare the phones before you look at a contract. For example, you may want to check the battery life, reviews from other customers and the general things like quality of sound, screen resolution and the speed of the phone. One of the most important things to remember when buying a phone is that you’re going to have it for 12 – 24 months, so picking a phone that is going to last and do what you want it to is important!

With a phone contract, you can also choose the tariff that you would like to take out. Most phone providers will offer you the choice of minutes, texts and data and the premium you pay is likely to increase the more you select. When it comes to working out how much internet data you will need, it’s best to think about how often you will actually use it. If you have Wi-Fi at home or at work, you won’t need to use your phone’s data as often so your overall usage will be lower. 

More affordable

Another benefit of a phone contract is that you are paying for the phone over a longer term rather than a large upfront payment*. This can make paying for a phone more affordable, especially if you’re looking for a more expensive model. You’ll notice that the newer, more advance smartphones like iPhones and Samsung models will have a larger price tag to buy out right, however a contract gives you the ability to pay for the phone over a longer period of time. 

*Remember that some contracts will come with an upfront cost that you will need to pay when you take the contract out. It may be worth reading the credit agreement and T&Cs before you make a decision.

Things to remember when buying a phone contract

Although there a lot of benefits to a mobile phone contract, it’s important to consider other important factors…

You’re tied in

Once you’ve agreed to a phone contract, you are tied in for the agreed period of time, so it’s important to think about the long-term financial implications and whether this will suit you. Under the Consumer Contracts Regulations you have 14 days to cancel the contract if you do change your mind however after this time you will be unable to cancel without paying a fine.

Early termination charges (ETC)

Some providers may even charge you an early cancellation charges also known as an ETC. This is normally calculated like below:

The phone provider will add all outstanding monthly payments of your minimum term including the VAT and possibly an additional charge for early payment leaving you with an ETC amount.

For example, if you pay £20 a month for your contract and you have 5 months left, that would be £100, with a 20% VAT of £20 and an early receipt of payment of £10 (per month) that would leave you with an ETC of £170. Please note that all calculations may vary depending on the phone provider and the percentages may change.

Credit score checks

When an application for a contract is put through, the provider is likely to run a credit rating report. They typically want to know how good your credit score is before accepting the contract. If you have any concerns or would like to check your credit score you can sign up to websites which provide you with the information.

Extra charges

It’s very cliché, but make sure you do read the terms and conditions to ensure you know of any charges that may be included. If you haven’t got unlimited texts and calls, ensure you understand how much you’ll be charged if you run over. You may even be able to set up a block which will prevent you from running over. If your phone has a usage section in the settings, you may be able to put a block on yourself. If you can’t find this in your phone, it may be worth calling your phone provider to see if they can do it for you.

SIM only

If you currently own a mobile phone and want to continue using it, why not just buy a sim! If there’s nothing wrong with your phone and it works well, there’s not necessarily a need to upgrade. At the end of the day you may have just spent two years paying for a phone so save yourself some money.

Most phone providers will offer a variety of sim only deals and you may find them much cheaper than taking out a new phone contract. All you need to do is work out how many minutes, texts and internet data you need and compare the deals.

Benefits of sim only

  • Cheaper deals - The key benefit to a SIM only deal is that you won’t have to pay for a handset. This is likely to reduce your monthly payments by a considerable amount.
  • Short cancellation notice – Most mobile phone providers operate on a one month rolling contract where you can give a 30-day cancellation notice. Unlike a phone contract you are unlikely to be charged for cancelling the contract.

Pay as you go

If you just need a phone to make calls or sends texts but don’t need to use it often, a pay as you go option may be the one for you. With a pay as you go deal, you simply pay for the texts, minutes and data, instead of paying a monthly premium.

Benefits of pay as you go

  • No contracts – you’re not tied into a contract so you can just top up when you want! This gives you more control of when you want to pay.
  • Option to change – if you decide you need more minutes, texts or data, you can simply upgrade by calling the provider.

How to switch mobile phone provider

If you’ve been with your current mobile phone provider for a while, you may be looking to switch. Maybe you’ve seen a new phone you like or a deal that’s too good not to take! It may even be the case that you’ve experienced poor customer service or bad signal in your local area. Follow these steps below to switch your mobile phone provider.

How long do you have left?

The first thing to check is how long you have left on your contract. If you’re looking to switch before the end of your plan, you may have to pay an early cancellation charge.

Check your network coverage

If you are switching because you want better signal in your area, it may be worth checking what the coverage will be like with your new provider. A lot of mobile phone providers offer a coverage checker so have a look at their website to check!

Keeping your number

Keeping your current number when switching over to a new provider is not as difficult as you think. Follow these steps below:

1. Get your Porting Authorisation Code (PAC) from your current provider. You can get this by giving them a call.

2. Once you have your PAC code, you will need to contact your new network provider and let them know what your code is. You’ll need to do this within 30 days otherwise the PAC code will run out and you will need to get a new one.

Protection for your phone

If you’ve recently purchased a brand-new phone or are looking to take out a new contract, then you’re going to want to protect it the best you can. Just think what would happen if you were to drop your phone, smash your screen or lose it! Here’s two ways to insure your phone.

1. Use your home insurance

If you have contents insurance your phone may be covered or there maybe cover you can add. Standard content policies may provide cover for your phone just like any other item in your home. You may be covered for loss or theft of the phone while it’s in the home, however it may not be covered for accidental damage. Accidental damage cover would allow you to claim if you were to drop your phone or get it wet. It’s also worth noting that your contents insurance may not cover your phone outside of your home. You can check with your insurer to see what’s covered under your policy or have a look at your policy documents to see what’s included. Budget Insurance customers can find their documents on our Self Service Centre here.

2. Separate gadgets insurance

When you take out your phone contract, you may be asked by the phone provider whether you want to take out insurance for your phone. This may be classed as gadget insurance, where you will pay a set premium every month to cover damage to your phone.

Let your friends know...

Back to articles