Pay-as-you-go mobile: Is it any good?

Man with a phone

Not a fan of long-term phone contracts? There’s another option - a pay-as-you-go plan, which means less commitment and no paying for text allowances that you’ll never use.

What is a pay-as-you-go mobile plan?

Contract mobile plans give you an allowance of minutes, texts, and data that you can use each month for a set price. But with pay-as-you-go, you're only charged for what you use. Each individual text or minute on the phone incurs its own charge.

On pay-as-you-go, you add money to your SIM, and some of that credit is then spent every time you make a call, send a text, or use mobile internet. When it runs out (or when you think it might run out soon), you can top it up. Your network will tell you how to do this, but you can usually top up with a card, online, through an app, or at ATMs.

Pay-as-you-go tariffs

Pay-as-you-go tariffs for calls, texts and MB of data vary between mobile operators. There can be some significant differences, so it’s always worthwhile checking out the different charges by networks before you make your decision.

Which is best: pay-as-you-go or pay-monthly?

Let's take a look at some cold hard numbers. TPO Mobile has fairly inexpensive pay-as-you-go tariffs, and good value pay-monthly deals too. This one comes with 512MB of data, 200 minutes, and 500 texts per month.

On pay-as-you-go, all that would cost you £125.80 each month. But on a contract, it's only… £3.99.

(Again, this is correct at the time of writing. Check with TPO for the most accurate pricing.)

If you use your phone any more than that, you're almost definitely better off on a pay-monthly plan, at least in terms of cost. Heck, if you ever connect to 3G or 4G mobile internet at all, pay-as-you-go will get too expensive too fast.

Then again, anyone who only uses their mobile occasionally - say, a few times per month - can likely get better value with pay-as-you-go. It's also good for keeping complete control over how much you spend, and means you're not tied down to a contract. Plus there's no need for a credit check which is required for a lot of longer-term contracts.

One compromise between the two is a pay-as-you-go plan that lets you buy bundles of calls, texts, and data to use within 30 days. These have the flexibility of pay-as-you-go, but are as cheap and hassle-free as a contract. Take a look at iD Mobile or giffgaff for plans like this.

Another compromise is a SIM-only contract with 30-day terms. You'll save money, but have the flexibility to change it around whenever you want.

What's good about pay-as-you-go?

  • Keeps costs low if you don't use your phone much
  • Lets you be completely flexible
  • No credit check necessary
  • Can get a new phone whenever you want
  • Lets you keep track of what you're spending

What's bad about pay-as-you-go?

  • Can end up expensive quite easily
  • Data is really, really expensive - not recommended for smartphones where you want to get Facebook notifications, use WhatsApp, and so on
  • Need to keep on top of your credit at all times
  • Topping up is hassle
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