Money Saving Tips

This is why I stopped paying for monthly phone contracts, and why you should too!

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I have no shame admitting that a few years ago I was paying for two monthly phone contracts. I wanted to use both Android and iOS phones, so I was paying around £80 per month. I don’t smoke and I didn’t have a takeaway coffee habit, so I was kind of justifying paying for the luxury.

However, to cut a long story short, the phone shape and form-factors started getting boring with the full-screen layout on every single phone staying the same, while the price started getting higher and higher.

So, about three years ago, I ended my last phone contract and moved to SIM-only contracts, and I have never been so happy!

Here are three reasons why you should always avoid pay monthly phone contracts.

Phone contracts are absolute rip-offs

Network providers package the phone and other benefits in such a way that you think you are getting a deal, but it’s totally not true. Let’s take the example of Three’s Apple iPhone 11 Pro Max deal.

If you choose the Apple iPhone 11 Pro Max Gold 64GB handset with unlimited data, minutes and texts, you would have to pay £79 upfront and £73 per month on a 24-month contract. So the total cost of acquisition is £1831 over 24 months. During the contract, you can’t move to another network or buy a different phone, as you are already paying a high monthly fee. If you decide to move, you will have to pay a penalty (Early Termination Fees)!

You can buy the same iPhone 11 Pro Max for £1149 in full or 24-month 0% APR monthly instalments from Apple’s website. So, Three is charging you £682 for the data over 24 months, about £28.42 per month.

Pay Monthly SIM Plans - Unlimited Data SIM Three

All four SIM-only deals on the Three website are cheaper than £28.42, Even if you take the most expensive deal (Deal 3), you will save £82 over two years.

Deal 1 will save you a missive £262 – amazing, right?

Networks won’t drop your payment after 24 months

Once you pay for 24 months, there should be no payment for the phone. If you want to keep the phone, you should only be paying for the data which is about £28 per month from the above contract.

However, this never happens. Networks won’t drop your payment so easily. They will either offer you a rubbish new contract with an outdated phone or pressurise you to take worthless add-ons. There is no customer loyalty whatsoever.

With cashback offers, you can save even more!

I am a huge fan of the Quidco cashback program. It takes almost nothing, but you can save a lot of money every day online and on in-store purchases. As of today, I have saved more than £850 on Quidco.

It’s as simple as 1-2-3.

Quidco Payment Activity

All you have to do to start saving is create a Quidco account, log in to your account, and follow different cashback offers before purchasing your product as usual. Quidco will track the purchase and after a few hours, the cashback amount will appear in your account. You can cash out the money in different ways; e.g. cash, Paypal, online shopping vouchers (Amazon, Debenhams, John Lewis, Tesco, M&S, etc.), etc. I prefer shopping vouchers as Quidco offers 3% to 25% premium payout bonus.

Remember Deal 1- Quidco is offering £70 cashback on the SIM-only contract, which means the cost of acquisition of the SIM-only deal comes at just £350 over two years or £14.58 per month!

Sim Only Offers in Quidco
Sim Only Offers in Quidco

That’s a £332 saving on a SIM-only contract – can you believe it?

Further, this deal is not just on for the Three network only. If you start calculating the lifetime costs for each deal, you will definitely see a difference. I hope this was enough to change your mind about monthly phone contracts. It is always wise to shop around for alternative deals and options in the market

Do you have any money-saving tips and tricks to share with fellow readers?

I am an SEO professional, expert in both on-content and technical search engine optimisation. Besides eating, breathing and sleeping SEO, I am passionate about travelling, photography, collecting vintage mobile handsets and philately. I am also keen on financial freedom - saving, investing and passive income.

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