How To Ensure That You Aren’t Paying Over The Odds For Your Mobile Phone Contract

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Image from Flickr creative commons via Ollie Craaford

As many as three-quarters of people in the UK are, according to MSN Money, trapped in a mobile phone contract which means they are paying more than they need to be each month, and often getting services which they don’t use.

The biggest problem most of us have is that we just don’t know how our actual usage of free minutes, data download allowances and the number of text messages we send actually compares with what’s allowed under our contracts. And as, in most instances, we don’t get these figures in an itemised bill for us to check over each month, or even each quarter, seemingly cheap mobile phone deals might not be the best ones for us.

Of course, the phone companies have sound reasons for wanting to keep this information to themselves, and one of those grounds is that it helps protect each phone owner’s privacy. The consolation is that, when we come to renew our contracts, this data should be used to ensure that our carrier can offer us a new contract which accurately reflects the history of the type of usage we have had over the course of our previous one.

Where the phone companies make most of their money is in the simple desirability factor of the latest smartphone or tablet computer. This is a case of simple market forces – they can simply get away with charging more for the products which people want the most.

So one of the first ways in which anyone can benefit from a saving is to consider trading down to a less popular phone, or one which doesn’t come from a company whose products automatically attract a premium simply because of their desirability.

The tipping point in a mobile phone contract, after which it can make financial sense to swap to another one, is usually at its halfway point. Once you’ve reached this point, it’s worth contacting your provider – they won’t send you a reminder – to ask whether they will review your usage, and let you trade down. It’s important to note that they won’t let you switch to a more expensive tariff with bigger allowances at this point – it only applies if you think your current allowances are too generous.

Even then, there are limits as to how far your provider will let you trade down, and usually the maximum saving they’ll allow you to make is £5 per month. Also, beware of administrative fees which are written into some contracts for changing your plan early.

One way in which people often get caught out with their monthly call allowances is that these may not include calls to 0500, 0800 or 0808 numbers. These aren’t included in most free call allowances, but a service called 0800Buster lets users dial a standard landline number which then puts them through to the ‘free’ number they require, provided they’re still within their monthly call limits.

Finally, the biggest sting in the tail of most mobile phone contracts is the cost of making international calls. While the European Union has stepped in and imposed maximum charges per minute for making and receiving calls, there is as yet no such agreement in place to cap costs in non-EU countries. One operator, Vodafone, currently offers a Passport tariff, however, which lets you make calls and take the minutes from your inclusive allowance, or receive them free, provided they don’t last longer than an hour. The key here is to contact your provider before you go away, as they might be running cheap mobile phone deals at the time which will give you access to lower tariffs.