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Contract or Pay as You Go?

Contract or Pay as You Go?

Do you want a cutting edge device like the Palm Pre or iPhone, or do you simply need the most minutes you can get for as little money as possible?

When comparing the latest mobile phone deals, make sure they have the right amount of minutes, texts and internet time for you. It’s pointless paying for a service you don’t fully use and you definitely want to avoid an unexpected bill if you exceed your allowance.

Mobile phone options are not easy to compare. They differ in many ways – some involve payment upfront whereas others involve monthly payments. Paying more upfront can often produce considerable savings over the long run. Comparison websites such as dialaphone.co.uk and moneysupermarket.com provide useful statistics to help make a decision.
When comparing the latest mobile phone deals, the most important figure to consider is the “total cost of ownership”. This is the total amount paid over the length of a contract. It takes into account both the upfront handset cost and the on-going monthly costs. It’s calculated as follows:
Total Cost of Ownership = Upfront Cost + (Monthly Cost x Number of Months)

Let’s look at the total cost of ownership of a new smartphone…

The Galaxy S4 is one of the UK’s bestselling smartphones. Featuring a 5-inch display at full HD resolution, a super-sharp 13 megapixel camera and the latest version of Android 4.2 Jelly Bean, it’s one of the best smartphones money can buy.

The total cost of ownership is around £100 cheaper over a 24 month period under a pay as you go deal as offered by giffgaff compared to a contract option.

Paying a bit more upfront allows you to save substantial amounts of money in the long run.