PAYG vs. Phone Contracts: Which is Better?

There is an ongoing debate concerning Pay As You Go (PAYG) deals versus phone contracts. With the staggering amount of money overspent on phone contracts, more and more people are now concluding that going PAYG may be more cost effective in the long run. If you’re just as confused as the next person which of the two types of phone deals is better, here’s a quick guide to help you along.


PAYG deals are phone deals that let you avail a handset without a contract. This means that you need to buy the phone upfront then you need to top it up with credit in order to enjoy your phone services. Once the credit is used up, you need to top-up again to continue using your phone services. While inconvenient for many, PAYG offers you more control over your phone bill because you top-up only when needed. On the downside, you need to have money to be able to afford a high-end handset if that’s what you want to buy.

Phone contracts

Phone contracts, otherwise known as pay monthly contracts, are phone deals that hook you to a contract typically over a 24-month period. As part of the contract, you get to pick a handset without paying for it upfront and a bundle plan inclusive of allowances for your call, text and data. In exchange for the subsidized cost of your handset, you get hooked to a monthly fixed fee you must pay until the end of term. Delay or missing a payment may mean bad news for your credit score.

Which is better?

At the end of the day, the question isn’t which is better but which is right for you? Both types of phone deals have their pros and cons. You just need to find out which deal offers the most pros specific for your situation and budget.