Pay as you go versus Phone Contracts

• What is a pay as you go deal?
• What is a phone contract?
• Pros and Cons (pay as you go)
• Pros and Cons (phone contracts)
• Choosing the right mobile plan

What is a pay as you go deal?

A pay as you go deal is exactly how it sounds - you only pay for what you use. You're not tied to a fixed monthly tariff. Instead you are in full control of how much you use (and therefore) pay for each month. 

With Asda mobile, you’re not tied into a contract, giving you the freedom and flexibility to come and go as you please. 

Our current pay as you go rates are:
 

You can also pick up great value monthly bundles, which give you data, minutes and texts (like a SIM only plan), but can be changed month on month. 

What is a phone contract?

A phone contract is when you pay for the cost of your handset and tariff simultaneously over the course of 12 to 24 months, so the price of your device is spread over the duration of your contract. You pay a fixed amount each month, so you know exactly how much you’re paying. 

At the end of your contract, you can either purchase a new deal, such as SIM only, or upgrade to a new phone.  

Pros and Cons

There are advantages and disadvantages to both types of deals depending on your phone usage and how you want to pay for your tariff (the amount of data, texts and minutes you are able to use). 

Pay as you go

A pay as you go plan puts you in complete control of your phone expenses. You choose how much you spend and how to customise your bundle, so you can have as much or as little data, texts and minutes as needed each month. And with zero contract commitments, you have the freedom to change, upgrade, or downgrade whenever you see fit. If you need a little bit extra, you can also apply add-ons to your current bundle for temporary data boosts. 

Read our full in-depth list of pay as you go benefits.

Pros

✔ Affordable as you only pay for exactly what you use, rather than possibly overpaying

✔ Never run the risk of exceeding your allotted allowance for data, minutes and texts each month, and incurring extra charges on your bill

✔PAYG deals are flexible, so you can change your bundle every month

✔You can keep your old phone and number

✔ No credit checks, so even if you have a poor credit score, it won’t interfere with your ability to pick up a pay as you go SIM

✔Access My Account to manage every aspect of your plan all from one online portal

✔ Choose from multiple options: a pay as you go, monthly bundles or recurring bundles

Cons

✘Need to already own a handset or be able to buy a handset outright, which can be an expensive upfront cost

✘Need to keep an eye on your usage each month to ensure you don’t suddenly run out of credit or data

Phone Contracts

When you choose a phone contract, you’ll remain fully aware of how much money you’re paying out each month, so you can keep a better eye on your expenses. The cost is also spread out throughout the duration of your contract, rather than all at once, which will benefit many customers. You could also earn an upgraded smartphone when it runs out, keeping you up-to-date with some of the best releases. 

Pros

✔You know exactly how much you’re spending each month as it’s a fixed price, so you can easily budget

✔ No upfront cost for a new phone, as the price is spread throughout the contract

✔ No need to remember to top-up your balance 

✔ Eligible for a smartphone upgrade at the end of the contract 
 

Cons

✘You could incur additional charges if you go over your monthly allowance or for terminating the contract early

✘Typically more expensive to pay for a handset at the same time as a tariff, and you generally pay more for the handset over the contract compared to paying for it upfront

✘ Locked into a contract, which isn’t good if your circumstances change

✘May have to settle for an older phone as your end of contract upgrade, to keep the cost down

Choosing the right mobile plan

Whether a pay as you go or a phone contract would be more suitable for you depends on a number of factors:

1. Your usage
2. Your current smartphone
3. If you don’t mind being locked into a contract

Your usage

If you tend to fluctuate in your mobile phone usage each month, then a pay as you go deal will be more ideal thanks to its flexibility. If you notice you’re using a lot of data each month, you can just upgrade your bundle.

A contract, on the other hand, can be useful if you are consistent with your usage each month, and don’t want to have to worry about topping up as and when. You can, however, set automatic recurring top-ups and bundles on a pay as you go SIM, so your account will add data when it falls below a set amount, or automatically apply a bundle each month. 

Your current smartphone

A phone contract can be tempting if you’re not happy with your current smartphone. It removes the upfront cost, which for new handsets can be extremely expensive. If you have the money though, buying a handset upfront and getting a pay as you go deal can be a lot more cost effective. 

If there’s nothing wrong with your current phone, then a pay as you go deal makes a lot more sense.

If you don’t mind being locked into a contract

Phone contracts usually last from one to two years, which some mobile users might not feel comfortable with, while others may like the assurance of staying within a fixed budget each month. If you’d prefer to be able to change your spend based on your circumstances, then a pay as you go deal would be better for you.

Other articles you may be interested in

• What is data roaming?
• The rise of SIM-only
• Benefits of SIM-only deals 
• Unlimited data SIMs
• Best phones for under £200
• Our switch to Vodafone

Feel free to contact our friendly customer service team on 2732 from an Asda mobile phone or 0800 079 2732 free of charge if you need more help.