With the increasing costs of phone contracts, it’s no surprise why many experts discourage customers from applying for one. Rather than apply for a phone contract, the recommendation is to go prepaid or Pay As You Go instead. It makes perfect sense in most cases but you can’t also discount the fact that phone contracts have a number of advantages to offer. If you’re thinking of applying for a phone contract, here’s everything you need to know.

What are mobile phone contracts?

Mobile phone contracts are one of the best ways to own the latest handset without paying for it upfront. If you don’t have the cash to buy a new handset, getting a phone contract is an inexpensive way to do it because the cost will be spread over the contract’s term. Typical terms you can choose from include 12, 18 or 24-month terms. You will pay a monthly fee until end of term, which will basically cover your handset’s cost as well as your call, text and data usage.

Who are eligible for a phone contract?

Anyone who is of legal age, employed and is a UK resident is eligible for a mobile phone contract. Most providers will also require you to have a good credit especially if you want the latest high-end smartphone. If you have bad credit, chances of rejection are very high because of the risks. If your carrier approves your application, the choices for handsets are often limited and the monthly costs as well as the related charges may be higher than usual. You may also consider checking out bad credit mobile phone offers for fast and easy approval.

What do you get with a phone contract?

One of the reasons why phone contracts are widely popular in the UK is because of the free handset. As part of the plan, you can choose a mobile phone in addition to your phone bundle plan. You won’t need to buy the phone upfront instead you pay for it in installment basis. Since there’s a bundle plan for your call, text and data usage, the rates are usually cheaper than if you go prepaid. There are also carriers that may offer free gifts and other promotions along with your plan as an attractive incentive to lure customers to sign up.

How much does a phone contract cost?

There are two major factors that will dictate your phone contract’s monthly cost. One is the handset choice. This means that if you choose a costly smartphone, it follows that your bill will also cost you more. Another factor to consider is your bundle plan. Plans that offer unlimited calls and texts, for instances, will let you call and text all you want but it will also reflect on your bill. If you’re not a heavy mobile user, you may be better off with a bundle plan that offers a less generous call and text allowance.

Should you get one?

Because phone contracts will tie you up with a lengthy contract, it’s very important to think over your decision carefully. You need to consider the pros and cons. As detailed above, phone contracts allow you to choose a handset and a bundle plan. Provided that you pick the right plan, great savings await you in the long run. Conversely, choosing the wrong plan can lead to costly consequences. So long as you can ensure that you’re going to apply for a phone contract deal that suits your needs, you’re on the right track. Click here for more tips on how to save on your phone contract bill.