There are really two types of contracts available for mobile phones: pay monthly and prepay - or pay as you go (PAYG) as it’s more commonly known.
There are pluses and minuses to both. The most obvious difference is cost, and the way you pay for using the mobile phone.
On the contract method, you pay at the end of the month. Opt for PAYG, though, and you’ll have to pay for your phone credit in advance.
That has its own benefits, of course. Not least the fact that PAYG customers can easily track how much they’re spending.
Customers on a pay monthly contract have to wait until the bill comes in before realising they've gone over the accompanying allowance and discover how much they now owe.
Contract customers are also on another sort of pay monthly scheme, for the mobile phone itself. It might appear to be free, but really you are paying for it as part of your monthly outlay.
That time frame is usually the duration for the entire contract, whether this is 18 or 24 months. Here, the cost of the handset is absorbed into the monthly tariff cost, often without you realising it.
That period of time is quite a long one, where there can easily be two generations of new phones within that time - leaving your handset behind, and owning an outdated mobile or just a worn and weathered device.
There is another way: pay as you go. Here, you pay for the mobile phone upfront, rather than having the cost broken down and included within a monthly contract.
Pay as you go customers also appreciate that they aren't tied to a lengthy contract duration and the freedom that gives them.
Costs are lower each month and are really only set by how much you want to spend, giving you full control over the entire set-up.
There are also what’s known as SIM only tariffs, which also do not tie you into a phone and a contact – for a lengthy period of time.
These can be in the form of a one-month rolling deal, or an entire year and they offer a good number of minutes, text messages and data, only without a phone.
This, in turn, still allows you to upgrade your phone, change and swap it around to whatever takes your fancy and whenever you like – the freedom is yours!
This guest post comes to us courtesy of Rob Kerr, contributing editor to our sister mobile phone comparison site Omio.com.