Contract Mobile Phones

You get a mobile phone either for free or for a subsidised price by entering into a contract with a mobile network operator. The contract will be valid for a certain time period and you'll be charged a fixed amount every month. You will also receive some free minutes of talk (within or across networks), free text messages, as well as free data download (for internet capable phones) for the fixed amount you pay per month. If your talk minutes/texts exceed the limits, you'll be charged accordingly.

Pay As You Go Mobile Phones (PAYG)


You buy a mobile phone for its complete price (no subsidy). Then you can opt for any network operator and top-up for making calls or texting. Once this top-up amount is used up, you can top-up for more.

So which is best Contract or PAYG

Contract or Pay as you go

Contract	PAYG
With a contract you are tied to a particular network provider for the entire duration of the contract. If you wish to terminate your contract in between, you might have to pay up for the remainder period.	You are not tied up with any network provider. Hence you can change to any provider at any time.
The mobile phone usually comes for free or for a reduced price.	You have to pay for the entire handset, which might work out to be very expensive if it is one of the latest smartphones on the market.
Contracts involve attractive freebies like free talk minutes, data and text messages. However, there is a limit.	You don't get as many freebies as with a contract.
The talktime and texts are usually cheaper than PAYG.	Talktime and texts can be charged more than for contract.
Usually, users do not receive any warning or alert messages when they reach their talk, data and text limits. They might only get a shock when they receive their monthly bill.	Since you use only what you pay for, there will arise no situation where you get a shock seeing your bill.
There's never a time where you run out of credit. Hence you can use your mobile phone at all times.	If you run out of credit, you can never make calls or send text messages unless you top-up again. You can however receive calls and messages.
Credit checks are done by the network operator before signing the contract to check if you'll be able to pay your monthly bills. If your credit report is poor you might not be allowed to sign the contract by some mobile network operators.	Credit checks are not performed.
If you are not a very heavy user, you might be paying for more than what you use.	You use what you pay for.

Go in for a Contract mobile phone deal if:-

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  You want the latest, feature-rich, expensive smartphone on the market.

  
  


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  You are a heavy user, who would make the most of all the free talk time, text and data allowances. Although you'll need to watch out for the extra usage.

  
  


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  You need to be connected with people at all times for official or personal reasons and cannot afford to run out of credit.

  
  

Go in for Pay As You Go deal if:-

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  You are not a very heavy user.

  
  


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  You want a simple, inexpensive mobile phone just for calls and text messages only.

  
  


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  You want a mobile phone just for emergencies.

  
  


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  You have a restricted budget for your mobile phone usage.

  
  

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