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Mobile phone contracts

A mobile phone contract is a way of paying for your mobile phone calls, texts and other services. You agree to pay a fixed monthly amount to cover your phone services for a set period of time.

A mobile phone contract will last for at least 12 months, but phone companies aren’t allowed to offer contracts that last longer than 24 months.

This page will help you decide if a mobile phone contract is the best option for you.

Top tips

You need to be sure that a mobile phone contract is right for you because:

  • you will be locked into monthly payments for at least a year  
  • it will usually cost a lot of money to cancel your contract.

If you decide you do want a mobile phone contract, it’s very important to get the right contract for you. Lots of people with contracts waste money every year because they are on the wrong kind of contract for the phone services they use.

How does a phone contract work?

You will usually get a bill every month for the services you used the previous month. If you have spent more than the fixed amount agreed in your contract, you’ll be charged extra.

Your contract will often include the cost of your phone or you’ll pay a reduced rate for it. This is usually the case with more expensive smart phones. When your contract ends you’ll be able to keep your phone.

When is a contract a good option?

A mobile phone contract could be a good idea for you if:

  • you make lots of calls or texts – for example more than an hour of calls a month
  • you use your phone for other things – for example sending emails or accessing the internet
  • you’ve already got a pay-as-you-go phone and you are topping up your credit several times a month.

The advantages of mobile phone contracts

There are some advantages of having a contract for your mobile phone, rather than pay-as-you-go or SIM-only:

  • you’ll have a big choice of different price packages
  • overall the cost of your phone services may be cheaper than with pay-as-you-go
  • you’ll usually be able to choose from a range of phones and spread the cost in your monthly payments
  • you’ll usually be able to upgrade your phone as part of your contract meaning you can keep up-to-date with the latest models.

The disadvantages of mobile phone contracts

Think about the disadvantages before you decide:

  • you can lose track of the services you’ve used meaning unexpectedly high monthly bills
  • you are tied into monthly payments for up to two years and if you want to end the contract early you will usually face huge penalties.

Is a contract right for you?

To help you decide whether a contract is the right option for you, here are some things to think about:

  • do you want to be tied into a contract which might last as long as two years?
  • have you had problems paying bills in the past that make it difficult for you to get credit? If so it might be hard to get a contract
  • are you on the electoral roll? If you’re not it might be hard to get a contract
  • are you going to use all the services included in your package every month?
  • can you afford to make the monthly payments for the length of the contract?

If you decide you do want a mobile phone contract, it’s very important to get the right contract for you. Lots of people with contracts waste money every year because they are on the wrong kind of contract for the phone services they use.

Make sure you know what you’re signing up for

By law, your mobile phone service provider must make sure you get all the information you need to know before you sign up to or change a contract. Depending on how you buy your contract they can tell you the information or give it to you in writing. If you want to be sure of what you’re signing up for, you should ask for it in writing. The information should include:

  • the key charges in the contract, including the minimum contract charge and any charges you’ll have to pay if you end the contract early
  • what the payment terms are
  • when the service will start and the length of the contract.

If you don’t receive any of this information before you enter into a contract you can complain to either the service provider or the shop who is selling the contract.

Next steps

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