Your first phone contract

Lesson 12 of 13 in our free Big Purchases guide: a 5-minute money game with the key points below.

This lesson is in the full version.

Free with a code from your uni, college, council, landlord or employer (worth £600/year). Lesson 1 of Big Purchases is free for everyone.

Questions you'll answer

Contract A: phone included, £32 a month for 24 months. What's the total?

Your friend offers to sell you their old phone 'still on contract' for cash. What's the risk?

Has a working phone already, wants more data → SIM-only or pay as you go. Keep the phone and add a cheap SIM-only plan. Much cheaper.
Wants to control spending with no surprise bills → SIM-only or pay as you go. Pay as you go means you can't spend more than you top up.
Needs a new handset, and a parent is happy to take on the contract with an agreed plan for payments → Handset contract (in an adult's name). It can work if everyone agrees who pays and what happens if money's short.
Saving up to buy a refurbished phone outright → SIM-only or pay as you go. Buying outright plus SIM-only often costs less over two years.
Fact: “A contract in your parent's name can affect their credit file if payments are missed.” — The person who signs is responsible, even if you use the phone.
Fact: “You can usually set a spending cap so your bill can't go over a limit.” — Ask the provider. It stops surprise charges for extras.
Myth: “In-app purchases charged to your phone bill don't count as real money.” — They're added to the bill. Turn on purchase controls to avoid nasty surprises.
Myth: “When a contract ends, the price always drops automatically.” — Not always. Check the end date and switch to a cheaper plan.