One of the most important choices you will have to make as someone using a mobile device is whether to opt for a pay as you go mobile plan or sign a contract with established prices.
Depending on how much you use your phone, making the wrong decision could make a world of difference in terms of how much you spend, which is why understanding both sides and knowing both pros and cons of each of them is essential.
So, when it comes to pay as you go vs contract, which one is the better option? Keep on reading to find out.
Pay as You Go – Pros and Cons
First, let’s tackle the good and the bad of pay as you go mobile plans.
Pros
- Typically cheaper: If you don’t reach for your phone that much, pay as you go might turn out to be a more affordable option, as you only pay for the minutes, messages, and internet you think you will use up.
- No credit check: In order to sign a mobile phone contract, you will most likely need to undergo a credit check, and if you have bad credit, it can be tricky to find a provider that will allow you to sign a contract with them. With pay as you go plans, there’s no credit check, which means that even if you previously made some bad financial decisions that affected your credit score, you’re still free to choose whichever provider you wish and use their services.
- More freedom: With contracts, you have to wait for a specific period (usually 24 to 36 months) to pass before you are able to change your phone number or provider. With pay as you go, this isn’t the case – you can change your mobile service provider as often as you like with no consequences.
- Flexibility: If you know that in a specific month, you will need to make more phone calls or use more internet, you can increase your package so that the new limits meet your needs.
Cons
- The available limits might not be enough: With pay as you go plans, there are rarely unlimited data options available, which is why, if you’re a heavy data user, you might find that the offered amount is simply not enough to suit your needs.
- Risk of running out: Since you have a specific number of minutes of gigabytes to use, if you’re not careful, you might find yourself running out of them when you need them the most.
- No new phone: Pay as you go plans do not come with a new phone, so if you were thinking about upgrading without spending a fortune, it might be worth asking if the mobile service provider offers the one you want in their contract offer.
Mobile Contract – Pros and Cons
Now that we’ve discussed pay as you go, let’s move on to the second thing we will be talking about, which are mobile contracts.
Pros
- Lower upfront costs: This is especially true for those who, aside from changing their mobile plan, also want to change their smartphone. New phones can be expensive, but mobile plan providers often offer their customers a discounted price as a token of appreciation for choosing them. Some even go as far as offering them for free or for pennies.
- Family plans can help you save money: If you’re looking for a mobile plan not only for yourself but also for your family, choosing a contract can turn out to be a better financial decision, as family plans tend to offer the same benefits as a regular contract but for a better price.
- Fixed costs: When signing a contract, you are presented with a fixed bill that you are expected to pay within a specific time frame. This helps you avoid any surprises in terms of costs.
Cons
- Lengthy: As we mentioned above, when you sign a mobile contract, you commit to the provider for a specific period, which typically ranges from two to three years (although, depending on the provider, it can be longer/shorter).
- There can be hidden fees: As much as anyone would like it to be, the thing with contracts is that not always all the fees are disclosed (or at least not in an easily visible place), so when you get that first bill, you might be surprised by the added fees, for example for the number’s activation.
So, Which One Is Better?
Both options have their pros and cons, as you can see, which is why answering this question is not that easy. The truth is that it all depends on your needs and your mobile habits.
For example, if you’re someone who rarely uses their phone and you’re content with the model you currently have, opting for a small package and a pay as you go mobile plan can be a better choice.
On the other hand, if you’re someone who constantly uses their phone, especially the internet, then a contract with unlimited data might be a better idea as you don’t risk running out of gigabytes when you need them.
So, in summary, the answer is that there’s not one answer.
The Bottom Line
Choosing which mobile plan you will go for is a very important decision that can affect how much you spend while using your phone. The two most common options are pay as you go and a contract. Both of them have their pros and cons, but in the end, your mobile habits are what determine which one will work best for you.
After all, what’s the point of paying for a contract if a small package of minutes and gigabytes for a fraction of the price would be more than enough? And vice versa, signing a contract might turn out to be more beneficial than continually buying new packages because the ones you purchased are not enough.
So, if you were wondering which one is better, the answer is simply both.
