SIM-Only Contracts vs Pay Monthly Contracts

The battle between SIM Only vs Pay Monthly has been ongoing for decades. If you’re wondering which of the two to go for, here are the pros and cons for each. 

What is a SIM Only Contract

Let’s start with the basics, what is a SIM only contract? Essentially these are SIM cards you can buy loaded with a bundle of calls, texts, data and minutes for a small monthly fee. These contracts are designed for people who already own an unlocked handset they’re satisfied with and are simply looking for a new tariff.

Benefits of SIM Only

Benefit 1 – Low Monthly Cost

SIM Only deals start at a significantly lower monthly cost than standard mobile phone contracts, some are as low as  £6.95/month! So if you’re looking to cut back on costs then a SIM only contract is worth considering. 

Benefit 2  – Great Variety

A wide range of SIM Only tariffs are available to cater to customer needs. Whether you’re looking for an all-inclusive plan with unlimited data, minutes, and texts, a budget-friendly option with limited data, or something in between, there will always be a deal in the market to meet your requirements. 

Benefit 3  – Flexibility 

Unlike traditional mobile phone contracts, SIM-only contracts offer a high level of flexibility. Many operate on a one-month rolling basis, which means if you’re unhappy with your data tariff or your monthly cost, you can switch to a different plan more suited to your needs or even cancel your plan every month if you wish. However it’s important to note not all SIM only contracts are like this, some come with fixed 12-month terms for example. Ultimately it comes down to picking which one is best for you!

Although SIM only plans with their high flexibility, low price and great variety are for some, they may not be perfect for everyone. Here are a few of the cons of SIM only plans. 

Con 1 – You Still Need a Handset

If your current handset is broken, or you’re simply not satisfied with it, then a SIM-only deal may not be the best option for you. SIM-only contracts are ideal for those who have a working mobile phone they’re comfortable using for a while or those with a new unlocked handset.

Con 2: Upgrading is Less Cost Effective

We all eventually get the urge to upgrade our mobile phones. However, if you’re on a fixed SIM only plan then you’re required to pay for any new devices upfront. This can be frustrating for those who love their SIM only contract but can’t afford to buy a device outright just yet. 

What is a Pay Monthly Plan?

A ‘pay monthly contract’ combines a mobile phone and SIM contract, typically offering a brand-new mobile phone (unless you opt for a refurb) along with a set amount of minutes, data, calls, and texts. When you sign up for one of these plans you’ll generally commit to a 12-month or 24-month fixed contract. These plans will either come with a handy £0 upfront cost or will have an upfront cost attached. In terms of cost, the theory is that if you go for a budget-friendly phone the less you’ll pay per month. Alternatively, if you go for a higher-end phone the more you’ll pay each month. 

Benefits of Pay Monthly Plans 

Benefit 1 – Enjoy the Latest Mobile Phones 

Some of the best phones in the market are available through pay monthly contracts. While these contracts typically come with higher monthly costs, for many, the investment is worth it. This ensures you’ll have access to one of the latest phones in the tech market. Alternatively, those looking to keep their monthly costs low can simply opt for a slightly older handset that still offers an excellent performance for example the iPhone 13.

Benefit 2 – Allows You to Spread the Cost

Not everyone can afford to buy a handset outright. If you fall into this category a pay-monthly contract is a great way to get the handset you want and spread the cost out over the course of your contract. 

Benefit 3 – Network Incentives 

Certain UK mobile phone networks offer an array of incentives for their customers to enjoy. For example, Three customers can enjoy the benefits of the Three+ rewards app, which offers fantastic perks such as free cinema tickets, discounted Caffè Nero drinks, and HelloFresh offers. Alternatively, Vodafone customers via the VeryMe rewards app can soak up the luxury of freebies from Millies Cookies, Costa Coffee, Hotel Chocolat and more. So when picking a pay monthly plan, choose your network wisely!

Con 1 – Higher Expense Compared to Buying Outright 

One of the main drawbacks of choosing a pay monthly contract is that by the end of your contract, you may end up paying more for your handset than it’s worth (especially since phones decrease in value over time). So if you can afford to purchase a handset outright and you’re not too fussed about upgrading it any time soon then opting for a SIM free device may be better suited for you. 

Con 2 – Credit Check Requirements

When opting for a pay monthly contract, a credit check is performed to determine whether you are approved or denied. If your credit isn’t the best, getting a mobile phone contract can be a frustrating process. When it comes to SIM-only contracts, only a small portion of them require a credit check, with the majority not requiring one at all.

Con 3 – Less Flexibility 

The majority of pay monthly deals only offer 12-24-month contracts, leaving very little flexibility if you change your mind about the tariff bundle you need, phone choice, or monthly cost. 

Hopefully, now you have more clarity on the pros and the cons of pay-monthly contracts and SIM only contracts. Ready to get shopping? Fonehouse offers both of these types of contracts at affordable price points!