Can Pay As You Go Plans Be Cheaper Than A Contract Phone?

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Can Pay As You Go Plans Be Cheaper Than A Contract Phone?
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Mobile contracts are by far the most popular way that people decide to get a mobile service. However, pay as you go plans could be a better deal. If you’re wondering whether a pay as you go plan might be for you, then you might have a few questions. Today we’re answering the most commonly asked questions about pay as you go plans to help you decide whether or not they’d be the best deal for you. So before you sign that mobile contract, here is everything you need to know about pay as you go.

How Does Pay as You Go Work?

Pay as you go plans are incredibly simple. You go to a mobile operator and get a SIM card, and you then load that SIM card up with credit. There are various ways that you can buy credit, including at an operator’s shop, online, by phone and in many newsagents and other high street stores.

When you use your phone credit is deducted from your account. Once the credit is gone your phone will stop making calls, sending messages and connecting to the internet, though you’ll still be able to receive calls and texts, and you’ll need to add more credit.

What are the Benefits of Pay as You Go?

Pay as you go has one big advantage over mobile contracts in that you only ever have to pay for services that you actually use. On a mobile contract you’re given a monthly limit for the amount of minutes, texts and mobile data that you can use. You have to pay the same monthly fee whether you use all your limits, half of them or even none of them.

Pay as you go Plans Can Save You Money

Also, because you pay for services before you use them on pay as you go, budgeting is a lot easier. There can be no unexpected charges or unpleasant surprises from a monthly phone bill.

What are the Disadvantages of Pay as You Go?

There are a few downsides to pay as you go though: Rates for calling and texting do tend to be higher on pay as you go than on contracts, also, pay as you go can be inconvenient. When you run out of credit you can’t make calls or send texts, and you can even run out of credit and be cut off in the middle of a call. With some mobile contracts, called incentive contracts, you can get a mobile phone for no down payment and then pay for it in instalments via your monthly phone bill, but with pay you go that’s not possible.

Which Users Benefit Most from Pay as You Go?

The biggest group of customers that benefit from pay as you go are light phone users. These are people who use less than ten calling minutes a week, use mobile data only for emailing and casual surfing, and who send three to four text messages a week.

Pay as you go Plan Users

Calling plan limits on minutes, texts and data tend to be too high for users like this, meaning that they often have to pay for services that they don’t use. Even though rates on pay as you go are higher, light users end up saving money because they’re only paying for what the use.
Image courtesy of imagerymajestic /

Another group that can benefit are those who use WiFi to connect to mobile internet, rather than 3G. A data plan makes up the most expensive part of a mobile contract, and there’s no point paying for it if you don’t use. If you regularly use WiFi to connect to the internet on your phone, you’re better off just paying for your minutes and texts with pay as you go.

Which Operator Has the Best Pay as You Go Deals?

Up until very recently pay as you go rates were very similar amongst all operators and it really didn’t matter which provider you choose. However, all that changed at the beginning of July this year, when Three announced a huge cut in their pay as you go rates. Calling minutes fell from 26p to 3p, text messages fell from 11p to 2p and the price of one MB of mobile data fell from 65p to just 1p.

Three also changed the rules regarding their pay as you go plans. Before, customers had to top up with credit at least once a month to get the best rates, and any credit not used in a thirty day period just disappeared. Now, users can keep their credit for as long as they want, and there’s no minimum requirement for how often you have to top up.

All of this means that just at the moment the best pay as you go deals are certainly with Three. Other operators are sure to catch up soon, but right now, other than these super low prices from Three, all other operators are pretty much the same.

Can I Use the Internet with Pay as You Go?

Yes, you can. This is a misconception from the early days of smart phones when operators wouldn’t allow pay as you go customers to use their credit for mobile data.

Pay as you go Internet Browsing

But these days you can connect to the internet as much as you want with your credit. Do be aware that mobile data use can be a little difficult to keep track of though, and will suck away your credit quite quickly if you’re not careful.

If I Connect Over WiFi Will it Cost Me Credit?

In general, no it won’t. There are a few exception when an operator has an agreement with BT for the use of BT WiFi hot spots, but these exceptions will be made clear to you by your operator when you get your SIM card.

Can I Use Pay as You Go Abroad?

No, you won’t be allowed to. Most operators do not allow pay as you go users to use their mobiles for roaming. There are exceptions though, so you’ll want to check with your operator before you leave the UK.

Author: Sam Jones’s daughter wanted to know more about the best pay as you go deals. He showed her the best way to make the most of comparison services and she found that sites like uSwitch could tell her what she wanted to know.

Did you find this article helpful and informative? Please comment and share with your friends, family and colleagues too…..

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  • prepay propositions

    One correction. You will find that most uk operators allow using payg abroad for roaming. Top ups are even possible from abroad by text if you have registered a debit card prior to leaving the country of your network. And that’s one use where the transparency of payg has real benefit as you can not receive a bill shock on your return.

  • Thanks for the correction and the extra information!

  • Pingback: T-Mobile Saves Travelling Customers Big Money | Pre pay as you go Blog()

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