Nowadays, mobile phone contracts are becoming an even more popular option compared to PAYG deals. For many customers, they come with a handful of irresistible goodies. Despite their advantages though, they have their fair share of cons. It is important to realise that not everyone is suited for a mobile contract.

Before deciding that signing up for a mobile phone contract is the best route to take, please take a moment to weigh the pros and cons of having contract phones.


The Pros

  1. Free Handset

One of the biggest selling points of a mobile contract is that it typically comes with a handset. Depending on how good your credit is, you’ll be able to choose your handset as well as the credits included in your package. For those who desire the latest smartphones on the market but do not have the cash to purchase them outright, a mobile contract is a very irresistible offer.

  1. Cheaper Rates

If your phone is basically attached to you, and you cannot keep track of how many minutes you you spent on calls within the week, it might make sense to get a phone contract. Contract bundles are often cheaper than PAYG, so you’ll see significant savings if you’re a heavy user.


  1. Convenient

With a mobile contract, there’s no need to top up. You just use it as you like and be billed at the end of the month.

  1. More Deals to Choose From

With the market for mobile continuously growing, your choices are endless. If you’re a heavy caller but not much of a texter, for example, you can tailor your tariff based on your needs. Remember that companies are competing for you, so all you need is to choose wisely.


The Cons

While the pros above may have gotten you excited to get a new mobile contract immediately, consider the following cons first before deciding if it’s right for you.

  1. Long-Time Commitment

A major turn-off with mobile contracts is the lock-in period wherein you need to bear with your company’s services for at least a year. It would be such a shame to sign up for a contract plan only to find out that you don’t have good coverage or are unhappy with the network for whatever reason.

  1. Can Be Very Expensive

While mobile contracts typically come with cheaper rates, it doesn’t mean that you’ll be able to save money with them. Often, especially if you took out a contract with a handset included, you’ll end up paying more because the cost of the handset is spread out during the whole contract. Not only that, you may find yourself either going over your monthly allocations or discover that you are paying too much for services that you aren’t able to use properly.

  1. Can Hurt Your Credit Rating

Mobile contracts involve commitments that tie you up for as long as 24 months. This means you’ll have to make your payments month after month for two years. If something happens that forces you not to make your payments on time, or worse, default on the contract, then you’re putting your credit at great risk.

Hand putting check mark with green marker on excellent credit score evaluation form.