SIM only vs mobile phone contract: which mobile tariff deal is right for you?

SIM vs mobile phone contracts

With mobile bills set to rise by 9% in 2024, many are looking for ways to lower their phone bill. One of the first things to consider is whether to sign up for a SIM only vs contract deal. 

With one, you are tied down to a mobile network provider while the other lets you keep your mobile device. 

But do you want a new mobile phone or better rewards with your SIM only deal? And what else comes into the picture when you’re looking for a cheap mobile tariff? 

We’ve compared the differences between SIM only vs contract mobile phone deals, and what’s best suited for your needs.

SIM only deal

Unlimited data SIM only contracts

Pros

  • Lower cost: You can buy a new mobile phone on your terms instead of when your contract ends. SIM only deals work out to be much cheaper than mobile contracts if you reuse your mobile phone. You would just have to pay for minutes, texts and mobile data usage. 
  • Keep your phone number: You can keep your existing phone number, avoiding the hassle of telling everyone your number has changed.
  • Flexibility: There are many mobile networks you can choose from, be it O2, Vodafone, EE or Three. You’re not limited or tied down to just one provider. You can always switch if you find a better deal. However, make sure you use a mobile coverage checker to see how the connection is at your postcode. 
  • Flexible contracts: You can choose a flexible SIM contract ranging from anywhere between 30-day rolling to 12, 18 and 24 months. After your contract ends, you’re free to switch your mobile provider for cheaper deals.  
  • Easier credit checks: This is ideal if you’ve been refused a SIM card before because of a credit check. SIM only checks are relatively easier to pass than phone contracts. Some providers like Lebara, VOXI or giffgaff don’t even do credit checks. 

Cons

  • Heavy upfront costs: It’s expensive to buy a handset upfront unless you spread the costs over 12-24 months. Most phones cost hundreds and can go up to thousands. 
  • Your phone may be locked: If you bought your phone before December 2021, you won’t be able to change your SIM. You will have to get your phone unlocked. However, most providers do this for free. 
  • Exit fees: If you’re tied down to a long-term contract and leave early, you’ll be charged a penalty fee. 

If your contract is coming to an end, you can switch your mobile provider penalty-free. Explore some of our best SIM only deals that are flexible and pocket-friendly. 

Mobile phone contracts

Pros

  • Latest phone: With a phone contract, you can get your hands on the latest iPhone, Samsung or Google Pixel at a slightly lower cost. You can even get an older model for much cheaper if you’re okay with not having the latest phone. 
  • Pay in stages: Not everyone has the money to pay upfront for a brand-new mobile phone. Having a longer mobile contract can allow you to pay monthly amounts. This way you don’t cause a massive dent in your savings in one go. 
  • Easy to manage: If you have a contract, you won’t get cut off by your network provider even if you exhaust your allowance. But this is as long as you don’t exceed the upper credit limit on your mobile tariff. 
  • Improves credit score: By making sure your payments are made on time and in full, you can build up your credit score. This can be helpful in the future if you’re applying for loans or getting better interest rates.  
  • Mobile provider rewards: Some mobile providers offer rewards or freebies to keep you interested as a customer. This can be anything from free Apple TV Plus or Disney Plus, discounted cinema tickets or early-access concert tickets.

The cons of mobile contracts

  • Network lock-in: Being tied to a specific provider for around 24 months can be an issue if your area has poor network coverage. 
  • Limited flexibility: Having a mobile phone contract doesn’t always allow you to change your handset or upgrade early. So if your device is no longer in good condition, you’re most likely stuck with it for longer. 
  • Credit checks: Having a good credit score will open up a wider range of options for you to choose from. But if it’s not a good score, your options will be extremely limited. 
  • High costs: Your monthly costs for handset and mobile tariff will be high as compared to a SIM only deal. This would potentially increase your overall expenses because of higher interest rates. 

SIM only vs contract: which is right for me?

In the end, what sort of mobile deal is right for you will come down to your own circumstances and needs. 

Get SIM only deal if: You’re happy with your existing handset and want to keep your monthly costs as low as possible. That way you can get the minutes, texts and data allowance that you need. 

Get mobile phone contract if: You need a new phone and don’t have the money to buy one upfront. Plus, it’s a good option if you want to build your credit score. 

Use our mobile phone and SIM comparison to find the best deals for you.