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Pros and cons of SIM-only contracts

A pile of sim cards on a white background

The popularity of SIM-only contracts has exploded in the last couple of years. With the latest top-of-the-range mobile phones making a sizable dent in consumer wallets, UK technophiles have been searching for ways to reduce their bills.

In the past, it was an all too common story. Your old expensive deal ended and you went into a shop looking to switch to a better one. Despite already having a handset, when faced with all the latest most desirable phones, you were easily persuaded into buying one as part of a new contract!

Nowadays many canny consumers are realising that if you already own a perfectly good handset then why not keep on using it? That way you can negotiate a better and cheaper deal with a SIM-only contract.

We know that deciding whether to opt for a SIM-only contract isn’t always straightforward. So, that’s why we’ve put together this list of pros and cons so you can weigh up the best option for you.

While some decisions are trickier than others, when it comes to insurance for an iPhone, we make things simple. Protecting your iPhone or other treasured tech from breakdown, damage, theft and even loss is easy – just call Gadget Cover to find the best deal for you.


What is a SIM-only contract and is it right for you?

A SIM-only contract is an increasingly popular way to get the data, calls and texts package you want without having to pay out for a new handset, too. Also, the ability to shop around means you'll find it simpler to negotiate a contract more suited to your needs and budget.

While SIM-only offers can be found for Pay As You Go (PAYG), these are really only suitable for those who don’t send many texts or make many calls. With PAYG, you’ll be sent a SIM card and then pay only for your usage and top up credit as and when you need to.

While PAYG is still favoured by older generations they have increasingly lost out to contracts and some of the big providers like O2 and Virgin Media have cut back on their PAYG offerings.

With a SIM-only contract agreement, you’re still entering into a regular contract so must make a regular payment each month for your texts, minutes and data. However, unlike regular contracts that include a phone, they tend to be for a short period; around 12 months compared to 24 months. Rolling 1-month SIM-only contracts can also be found – giving you an even greater level of flexibility.

A mobile phone screen down on a tablw with a sim card and tray laid out next to it

How do you move to a SIM-only contract?

To move to a SIM-only contract after your old contract has ended is pretty straightforward. Just choose a suitable deal, pop your new SIM card in and you’re ready to enjoy your new cut-price contract. As usual, you can transfer your old number to the SIM by asking for your PAC code when you switch providers.

There is such a huge variety of SIM-only contracts to choose from, there’s sure to be a package to suit your requirements. Some providers even offer SIM-only contracts with unlimited data, texts and calls, which are well worth checking out.

However, if your device was supplied by a specific mobile network provider, there could be a chance it's locked to that network. If it is, you’ll need to unlock it before inserting the new SIM. Simply contact your old network and ask them to unlock the phone. They can usually do this either remotely or by sending you a Network Unlock Code. This is usually done in two to three working days, although some may charge you.

Some companies offer unlocking services on the high street. However, be cautious before handing over your well-loved gadget. There have been problems in the past of phones being damaged and they sometimes charge a hefty fee.


What are the pros and cons of a SIM-only contract?


SIM-only contracts – the Pros


If you don’t need a new phone, SIM-only contracts can be much cheaper

The standards of manufacturing that go into modern mobile phones means that many have a far longer lifespan than the 12-24 months they're usually used for under regular contracts. So once your old contract comes to an end, it seems silly not to continue to use them with a more affordable SIM-only contract. Particularly if you’ve grown attached to your phone.

After all, upgrading to the latest model is always going to be more expensive than continuing to use your existing phone with a new SIM. Next time your contract comes to an end, why not call up your network to see if you can negotiate a better rate for a SIM-only contract? You might be pleasantly surprised!

When we use our phones for so much it’s easy to see why we become so attached to them. Having iPhone insurance in place means your precious phone is protected whatever happens.

A mobile phone with its sim tray open and a sim card next to it

There are great deals on refurbished or low-cost handsets

Even if your old phone is in need of an update, it doesn’t mean you have to buy a brand new one with an expensive long-term contract. There are some incredible deals out there that a SIM-only contract will let you take advantage of.

Many mobile manufacturers produce phones at a lower price than their flagship range but still with excellent features. For example, the Huawei P Smart is a fantastic phone with a great camera, battery life, storage and a sharp design all at an affordable price.

By investing in a cheaper handset and a SIM-only contract you can save a lot compared to getting a contract for the latest model with all the bells and whistles.

That said, many of us still want the best a company like Apple has to offer. And a SIM-only contract means you can still get one of these desirable gadgets without breaking the bank.

Many retailers are now selling refurbished phones that have been professionally cleaned, checked and restored. A really affordable option if you still want a top-of-the-range phone at a more affordable price.

Whether or not you’ve gone for the latest iPhone model, having iPhone insurance in place will protect your device from a whole range of problems.


Offer greater flexibility

With a shorter contract you’re in a much better position to shop around the many different networks and plans to secure a deal that's right for you. Each of the networks offer SIM-only contracts with different price points, benefits and tariffs. For example, if you’ve got a one-month SIM-only contract and you see a better deal, then simply change network at the end of the month.

And it’s not just a better deal that might convince you to switch. Poor reception in your area or poor customer service are also common reasons to change providers. Frequent switching is a great way to put the power in the hands of the consumer rather than the mobile phone companies.


Easier credit check

The credit checks for a regular mobile contract can be stringent. So, if you've been turned down for a new phone following the credit check, don’t despair. You could still qualify for a SIM-only contract.

While the credit checks for SIM-only contracts for most consumers should be no problem, some one-month rolling SIM-only contracts don't require a credit check at all. So, you can still find an affordable SIM with good amounts of data even if you have a poor credit rating.


SIM-only contracts – the cons


You still need a handset

By opting for a SIM-only contract you’ll obviously need your own device to pop the SIM into. If you’ve already got a handset, or can get one for free from friends or family, then there are great savings to be had. However, if you haven’t then this expense needs to be taken into account. Unfortunately, even a basic handset that's a few years old could set you back several hundred pounds.

This is why it’s sometimes difficult to balance the initial cost of a SIM-only contract and handset. With a regular contract you're paying for both at the same time. And by spreading the cost over two years you often don't need to spend much up front.

If you’re on the lookout for a handset then the iPhone is an obvious choice. Apple is easily the most trusted provider of quality devices on the smartphone market offering excellent functionality and unique design. Protect your precious purchase with iPhone insurance if you want to keep it in tip-top condition. Unlike some insurers, here at Gadget Cover we even cover minor screen cracks. And if the item cannot be repaired, we will replace it.

A sim card with frames to fit various devices

You need to check for restrictive terms

When signing up to any contract, it's important that you read the terms and conditions. And this applies to SIM-only contracts, too.

If you're signing up for a 12-month contract, it's important to find out how you can end it if you want to. A house move to somewhere with poor network coverage or experiencing bad customer service are both common reasons to want to end a contract. That’s why researching all the networks beforehand is so important to finding the right deal for your budget.

Also make sure to look at the terms concerning things like data allowances and call caps. For example, if you're getting a contract with 12GB of data included then what happens if you go over that? It’s so easy to do this that when looking for a contract it’s often better to overestimate your usage. It’s more cost effective to pay a little extra every month rather than going over and being charged a premium.

A good option for many is to opt for an unlimited everything deal. However, these aren’t always as generous as they seem. Despite their name, some of these deals still have a cap in the small print or speed restrictions for heavy users during peak times. Read the terms and conditions carefully and always ask questions before signing on the dotted line!

If you’re always exceeding your data allowance, you can set caps which send you a warning message when you’re getting close to your limit.


How much can you expect to pay for a SIM-only contract?

As the lifetime of handsets increases and recycling and repairing becomes more widespread, people are holding on to their phones for much longer. So, the value of a SIM-only contract has become clear.

This fact hasn’t been lost on the mobile network operators and there is a huge amount of choice on the market. While the obvious choices remain with EE, Vodafone, Three and O2, there are now a host of smaller names offering unique selling points and market-leading deals.

A quick internet search will yield a huge number of results for you to sift through. These can range from a one-month contract for as little as £5 per month for 1GB of data, unlimited texts and unlimited calls, to a 12-month contract at £16 per month for unlimited data, calls and texts.

The key to making great savings is to shop around. So, when your contract next comes up for renewal, spare the time to investigate your SIM-only options.

A sim card with a tray and a tool next to it

iPhone insurance from Gadget Cover

iPhones are truly exceptional devices, whatever contract you choose. That’s why the team at Gadget Cover are always searching for the very best iPhone insurance policies suitable for your device, requirements and budget.

Gadget Cover policies include protection for things like accidental damage, liquid damage, theft, breakdown and unauthorised usage as standard. And for an extra premium your iPhone will be covered against loss, too.

Additional benefits of our policies include:

  • Family cover to extend protection to your immediate family. So, if your partner loses or damages your iPhone while out and about you’re also covered.
  • Worldwide cover to include use of your iPhone anywhere in the world, up to 180 days in any one year.
  • E-wallet cover to refund the cost of unauthorised transactions made using your e-Wallet facility up to a maximum of £500.
  • Accessories cover (up to £150) if they are lost, stolen or damaged at the same time as your gadget.

Protect your mobile with iPhone insurance from Gadget Cover today.

Policy benefits, features and discounts offered may very between insurance schemes or cover selected and are subject to underwriting criteria. Information contained within this article is accurate at the time of publishing but may be subject to change.

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