I am looking for a phone contract that has no upfront costs. However, there is a lot of contradicting information online about whether or not it is worth it. Is it more affordable to have a phone contract without an upfront cost?
The upfront cost of more expensive handsets is usually a part of the contract plan. However, older models will not have an upfront fee and will instead include add-ons.
Is it more economical to have a phone contract without an upfront payment?
You will pay more over the term of your contract because there are no upfront costs.
Even though you won’t need to make a big outlay right away, your monthly bills will be much higher throughout your contract.
What are some of the benefits and drawbacks to phone contracts that have no upfront fees?
Pros
- Spread the cost over some time. If you don’t want all the money at once, it is easier to manage the cost.
- It’s easier to purchase top-end phones. New handsets can be costly, especially if you are on a tight budget. You can get the phone that you want and then pay monthly for it with no upfront fees.
- Older handsets will be cheaper. There are many budget and mid-range devices that don’t need an upfront payment. They are still great devices, even though they may not have all the bells and whistles of newer handsets.
Cons
- Your monthly bills will be higher. You’ll pay more for your handset because you won’t have to spend any extra.
- Contract lengths may be extended. These types of deals can have a contract term up to 24 months. You won’t need to pay an upfront fee but you will be bound to a contract that you may not be able to cancel.
- In the long-term, you’ll be paying more. These deals will usually cost you more than the handset for the duration of a contract.
There you have it. These are the benefits and disadvantages of a contract that does not require upfront payments.
Click the button below to see our deals without upfront costs if you have decided that these are the best deals for you.
Now you know it is smart to pay some of the phone contract upfront. What are the pros and disadvantages? What should you pay for a lump sum?
Upfront Contract Costs Explained
If you purchase a phone with a monthly contract, you will be required to pay it off monthly. You may be asked to pay a lump sum as a deposit for newer phones. This upfront charge is what retailers and mobile phone networks refer to as.
The upfront cost was used by mobile phone networks to determine the total contract cost. You’ll notice that the monthly premiums for the same phone will be cheaper if you compare deals.
Phone contracts that do not require upfront payments are possible. These handsets will usually be older models that have been in the market for some time.
What are some of the benefits and drawbacks to paying upfront for a phone contract?
- Your monthly premiums will be lower if you pay more upfront
- You can choose from the latest phones
- Be aware that you will need to pay a deposit before you can use the money.
- A lump sum is required, which can sometimes be as high as several hundred pounds
- This lump sum is in addition to your first monthly premium. You could end up spending quite a bit in one month.
What should I expect to spend upfront?
Expect to pay up to £200 for the top-of-the-range phones. You can expect to pay even more for larger models of the new iPhones and Samsung Galaxy S handsets.
We believe that an upfront payment of between £50-£100 is fair if you want to get a lower monthly premium for most handsets.
This will reduce your monthly payments by £5-10 per month. That means you have less money every month.
How do you weigh up a phone deal with an upfront price? In our guide, we examine whether the cost is lower.
Do I have to pay upfront for my phone?
You can save money if you can pay upfront and get your phone without a contract.
We crunched the numbers to find that buying a phone and getting a SIM-only deal is often more affordable than purchasing the same phone with the same allowances on a monthly agreement.
There’s a catch: Buying a phone directly is not an option unless you have substantial savings.
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