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How to save money on a contract phone

Smartphone contracts can be expensive, but if you are careful there are some ways you can save money. So before you go shopping and sign up to that two-year deal, here are a selection of quick tips that could help you save money on a contract phone.

Sim only
Many people think that Pay as You Go and Pay Monthly are the only two contract options, however there is a third – Sim Only. Because you aren’t getting a free handset the monthly cost if often a lot cheaper, yet many contracts offer a similar call/text/data allowance to a conventional contract. This often works out cheaper than Pay as You Go, particularly if you are using a lot of data and opt for 1GB or 500Mb allowance.
Another advantage of Sim Only is that you can choose between 12-month and 1-month rolling contracts. The latter is especially useful if you don’t want to be tied into a contract or are waiting for a new phone to launch.

Capped tariff
One of the most unappealing thing about a contract is finding out you’ve gone over your monthly allowance – typically data use if you browse the internet a lot – and been charged extra.
It’s now possible to cap your monthly tariff so you don’t get any nasty shocks when your bill comes. Tesco Mobile lets you put a limit on your tariff, so you can only use the minutes, text and data in your plan, if you’re desperate to top up, you can add more credit using a pay as you go top-up card.

12-month contract
Signing up to a 24-month contract can be daunting. More than ever, as financial markets are increasingly the job market is far from stable. A 12-month contract provides peace of mind, should anything happen. Shop carefully though and realise that depending on the type of phone you choose, you may often end up spending a little extra each month, but there’s any uncertainty, it’s worth it long term.

Pay more up front
Everyone knows that the major networks give free phones away at a loss, because they’ll make the money back over the term of a contract.
One way to reduce the cost of your contract is to pay for the phone up front, this means you can usually opt for a cheaper tariff or go for a sim-free option (see above).

If you want to pay up front for you phone, but don’t have any cash a quick way to get some money back is to recycle your old phone. Websites like Tesco Mobile Recycling can offer pounds for a working phone – you can expect to pay £181 for a working iPhone 4 or £47 for the HTC Wildfire. Payments go into your bank account

Value tariffs
It sounds simple, but ask your network what deals are available. Each of the major networks has its own deals with mobile phone manufacturers, so if you’re prepared to be a little flexible in the type of mobile phone you go for, it’s possible to pick up a bargain.

Nearly new
Ok, so you’ve got your heart set on the latest HTC or Apple handset, but money is a bit tight, it it’s possible to get a fantastic phone that is six/eight months old, that offers many of the features of a new handset. A good example of this is the Blackberry Bold 9780. This phone has recently been replaced by the Bold 9900, which surpasses it in terms of performance, speed and build, but if you just want a Blackberry with a full QWERTY for push email and security, it costs a lot cheaper than the 9900.

Extra savings

Buying a phone can also save you money elsewhere. Buy a Pay Monthly phone from Tesco and you can save up to £250 on fuel. Full details are here but with fuel prices getting higher, if you’re considering a Blackberry Cuve 8520 or LG Optimus Me, it’s worth checking out.