Money Saving

Unbundling: Your Hack To A Cheaper Phone Contract

Recently, we’ve been interested to hear about a great trick that’s helping people get cheaper mobile phone plans.

Known as ‘unbundling’, it involves eschewing the traditional all-in monthly contract in favour of a package that you piece together yourself.

As you’ll already know, a monthly phone contract usually brings together the handset cost plus charges for data, calls and texts into one monthly payment.

These often don’t represent the best deals, so ‘unbundling’ your phone could be a way to make sure that you end up with less money leaving your bank account each month.

It also means that you’ll own an unlocked handset, which means more freedom in the long run and the chance to take advantage of excellent sim-only deals.

Let’s take a look at how unbundling works, as well as the pitfalls that savvy consumers need to be aware of.

Step 1 – Financing your handset

Unbundling: Your Hack To A Cheaper Phone Contract

If you a) already have a handset that you plan to keep or b) can afford to pay for the handset you need upfront then congratulations, you’ve already completed this and can move straight to step 2. Everyone else needs to find a way to pay for their phone, which will usually mean using a credit card or small personal loan.

Alarm bells shouldn’t be ringing when you hear this: while consumer debt is often touted as the shortcut to financial destitution, it’s actually a financial tool that has it’s uses. However, you do need to be cautious – which means doing two things. Firstly, make sure that you understand how much interest you’ll be paying. Best case scenario, try to find a credit card with an introductory rate that’s offering 0% for a set number of months. This will allow you to spread the cost of your phone without actually paying any interest. But, even without that deal you’re likely to save money. That’s because the interest that you wind up paying on a phone contract can be enormous – usually several times what you’d expect to pay on a loan.

Secondly, make sure you can afford the monthly cost and make significant payments each month. There’s no point getting a good deal if it’s a deal that you can’t actually afford. Calculate the monthly cost and how long it will take to repay and see how well it slots into your budget.

Step 2 – Choosing a sim card

Unbundling: Your Hack To A Cheaper Phone Contract

Once you have your handset sorted, it’s time to choose a sim. Since you’ve decided to break free from the traditional contract model, you might decide that you want to use a pay-as-you-go sim to avoid commitment to one network. That’s fine, but realistically the sim-only contracts offered by many networks these days will represent significantly better value.

You’ve bought yourself a lot of freedom, so shop around – and remember to consider smaller networks as well as the big four. Many of these are actually powered by the same network anyway: GiffGaff, for instance, uses the infrastructure built by O2. This means that you can expect similar coverage for a discount.

Think that unbundling your contract might be the way forwards? We’d love to hear about some of the excellent deals that our readers manage to snag!

Current Sim Only Deals

Quidco currently have cashback available on Sim Only deals from 02, Three, EE, BT, Virgin and Vodafone.

  • Three are offering from £10 to £70 cashback for Sim Only deals from £9 to £31.
  • 02 are offering from from £7.50 to £70 cashback on Sim Only tariffs from £9.99 or less to £30+.

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Master of the budgets. Provider of the tips. Author and owner of DumbFunded.co.uk.
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