Personal FinanceRetail & ShoppingTechnology

Stop paying too much for your phone bill

The monthly phone bill is one of those expenses that can seem to slip under the radar – you realise that you need more data each month, so you let them up your tariff by a fiver… you upgrade to the latest model and your plan goes up again.

The next thing you know your £15 plan is up to £50. So what can you do to get a better deal?

Don’t fear the repayment charge

One thing that can leave you feeling locked into your contract is the threat of a hefty early repayment fee for exiting early. In some cases, though, paying a one of lump sum and then switching to a cheaper sim only plan could still work out cheaper in the long run.

Work out how much you’d spend on your current plan, if you carried on paying your existing tariff until the end of you term. Compare this to the cost of the early exit fee, plus the monthly payments on your new plan.

Which works out cheaper? If you only have a few months left and your new plan is significantly cheaper then you may actually save despite paying the fee.

Set yourself a reminder

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If you can’t leave your plan right away, then set yourself a calendar reminder to cancel as soon as you get the chance.

By being proactive, you’re reducing the likelihood of simply letting them upgrade you or keep you on your existing tariff because you’ve reached the end of your existing contract without thinking about what to do next.

When your reminder goes off, get straight on the phone to your existing provider and let them know that you want to leave because you’ve found cheaper deals elsewhere.

They might offer you a really good deal so that you stick around – in which case don’t be afraid to take it – otherwise be prepared to call their bluff and find a new provider.

Work out if you can save by buying the phone outright

Busting Myths: Can You Improve Your Credit Score By Borrowing Money? - iPhone X

In many cases, buying a phone outright will save you money long-term. It means that you can either use pay-as-you-go or get a sim-only contract.

In many cases, this works out far cheaper than paying for the handset (plus interest) over many months as part of your contract deal.

This isn’t a tip that only applies to people with a swelling bank account, either. If you have a good rate on your credit card – or, even better, a 0% deal – then work out whether you could save money by buying your handset outright but on credit.

Whatever you do, remember that a mobile phone contract is a kind of debt. Missed repayments carry the same consequences as with a credit card or catalogue loan, which means that racking up a monthly payment you simply can’t afford is a quick way to get into financial trouble.

If in doubt, avoid the hassle entirely by buying a handset that you can afford outright and setting it up on a pay-as-you-go plan.

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