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Published on February 13th, 2013 | by Guest Writer

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What Are The Benefits Of Non-Contract Phones?

Mobile phone service providers determine how much money you will pay for your phone hand set (if you buy it from them) as well as as how much you will pay for phone services. One of the problems with this can be that you end up paying far more than you should or than you would expect for your phone.

A good example of this is the iPhone. iPhones come at a premium price anyway, being a very desirable model, but if you’re smart you may have realised something important. With the release of new models, you can often get older models for a much better price. With the release of the iPhone 5, iPhone 4 prices have plummeted steeply. But simply buying the phone isn’t enough you have to have service on it too.

How Can a SIM Only Plan Save Me Money?

SIM Only plans aren’t technically non contract plans, as most companies will require you to sign a contract of at least a year before giving you a SIM card. However, these plans tend to be much cheaper than regular mobile phone plans because they do not contain a monthly charge to offset the cost of the phone that the company has given you. They do presume that you already have a phone, and will not provide you with one.

Other than that though, they give you a plan with calling minutes, text messaging and data usage just like any other plan. There are some companies, such as the mobile service provider Three, that will offer a rolling month by month SIM Only plan that does not tie you into a long term contract and still offers the savings of a regular SIM Only plan.

What about a PAYG Plan?

The great benefit of a PAYG (or pay as you go) plan is that you only pay for what you actually use. You pay for the calling minutes you use, for example, rather than a set amount of calling minutes per month. These calling minutes may come at a more expensive rate than those on a contract plan, but if you know that you’re not going to use all of the minutes on a plan, this may be to your advantage.

Something to keep in mind with PAYG plans is that they often offer benefits to those who regularly top up their accounts. For iPhone users in particular it’s important to know that many plans give unlimited data access to people who put a minimum amount of credit onto their account each month. This can save you a lot of money in data charges. Data charges tend to be the most expensive part of a PAYG plan.

The disadvantage of PAYG plans is that you do have to be organised, since your phone may stop working once you run out of credit. But the money saving element really makes up for this. As with SIM Only plans, PAYG assumes that you already have the phone that you wish to use, and therefore does not charge your account for phone purchase.

Phil Turner has watched iPhone 4 prices come down in recent months and knows many people who are now planning to get one.

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