Mobile Phone Consumers with Bad Credit Look for a Plan B

The recession has bitten a lot of people here in the UK and now, as people are coming round to renewing their contract or are looking to get a contract for the first time, some are getting rejected.

This is all because of a thing called a credit rating – and some mobile phone consumers have found that their credit rating is rather bad, meaning that mobile phone companies aren’t too enthusiastic to give them credit on a long-term deal.

It is really bad news not only for consumers, but for mobile phone companies, too. They have seen the amount of credit they have available to give their consumers dry up, which means they are now having to be very picky on who they give contracts to and have to see who are the best candidates to pay up at the end of each month.

Some people aren’t even bothering with contract deals anymore because they are simply too expensive and people are trying to save as much money as they can during these tough times.

Enter stage right the SIM-only contract, which many different mobile phone companies are beginning to offer. It could be said that SIM-only contracts are like a halfway house between a contract and a pay as you go deal and are perfect for those whose credit is not very good.

As many people are sticking with their old handsets when they are finishing with a contract, they are taking up a new SIM-only contract and sticking it into their mobile phone. Many people like the idea of no commitments that come with this kind of plan. As there are no handsets to be tied to, deals can be cancelled with just 30 day’s notice.

The opportunity that this provides is brilliant – not only do you get a deal which is a lot cheaper than a normal contract, but should you decide to switch to a better deal you find in a month, there is nothing to stop you from doing so.

For some from the word ‘go’, contracts have been an expensive no-no. Even though the majority of contracts involve a free handset, many do not like the commitment of being in a contract for 12, 18 or 24 months and some find the expensive monthly payments of up to £40 a month really unattractive.

However, SIM-only contracts are being seen to be more cost friendly. For example, one SIM-only deal from TalkTalk, of the Carphone Warehouse, is only £7.50 a month with no strings attached and the option to pull out at any time.

Many mobile phone companies have now jumped on the bandwagon with this new type of contract, and the consumers love it.

The chief executive of T-Mobile, Jim Hyde, had this to say about SIM-only contracts: “We have definitely witnessed an increase in SIM-only deals as the credit crunch has impacted customers. People are staying with their devices for longer, which isn’t necessarily a bad thing for us.”

From a business sense, it seems that SIM-only contracts are a great thing for consumers. This is for a number of reasons; the most notable of these is that there is less chance of someone not being able to foot the bill of their mobile phone contract.

There is loads of choice out there for people who are considering trying out a SIM-only contract – with the opportunity for consumers to simply try it out for 30 days to see how it fits in around their lifestyle. The idea is proving to be a money-making one for mobile phone companies who have launched many different ones to suit people from all walks of life.

For example, Vodafone recently launched their International Super SIM deal. The deal, which allows people to ring mobile phones in the US from just 5p a minute, is geared at people who do not want a contract but who do want great rates and no commitments.

With the Internet a great place to compare deals and some comparison websites even offering people the opportunity to check out different SIM-only packages, people who want a deal for their mobile phone are having a great time.

All of this said, it is not to say that pay as you go should not be considered as a good option for mobile phone addicts. Even though contracts once were always the best things for those types of people who probably use their phone way too much, some PAYG deals have been helping those who are glued to their mobile phones save some serious money.

There are some great deals out there, with some mobile phone networks completely abolishing charges for using mobile phones abroad over the Summer period and others offering five times more credit than the value of a top-up.

At the moment, the recession means that there are loads and loads of people who only have PAYG as an option. This is because most contracts require credit checks which can mean that some mobile phone companies deny their customers the opportunity to renew.

This all comes as loads of advice has been given to people who are looking for mobile phone deals but who are also looking to save money at the same time.

One expert has said that going for a contract which gives you free extras like a Nintendo Wii can be a really bad idea, because sometimes buying a contract and the console separately can actually save you more money.

The best tip, whether you are choosing pay as you go, contract or a SIM-only plan is to look around on the Internet for the best deal before you try to buy anything. With a variety of price comparison websites and the official websites of mobile-phone networks all battling to get your business, there are so many chances to get everything you need from your mobile phone credit for a lot less than you actually expect.