4 alternatives to the traditional mobile phone contract (even if you’ve got a poor credit score!)

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Poor credit history, pure impatience or unease with monthly bills – traditional phone contracts don’t suit everyone. But the way mobile phone contracts work is diversifying to allow greater flexibility and choice for consumers on every budget.

  1. Pay As You Go
    Pay As You Go (PAYG) payment plans have grown. Once the last resort of those with poor credit scores, modern PAYG plans are designed to be exceptionally flexible and give as much for your money as possible.A huge pro is that you don’t need to shell out for a handset. The market for second hand devices is growing, and that’s having a knock-on effect for service providers looking to issue SIM-only PAYG tariffs that offer a lot for your money but don’t tie you down (and put you off!)

    Customer retention is a big part of PAYG tariffs, and that means there are plenty of perks out there for the savvy consumer, even those with a poor credit score.

  2. Rolling monthly contractsMore service providers are rolling these contracts out. They’re structured to allow monthly Direct Debit payments (and all the pros of a monthly SIM-only contract) that cover calls, messages and data usage. The pro for you is that you can cancel the contract at any time for no additional cost. For example, if you’ve got a bad credit score and want to take a small step back into Direct Debit payments, this is a great way to test the water.

    For many mobile phone users, bad credit is an issue. According to BBC financial reporters (http://www.bbc.co.uk/news/business-17628048) a mobile phone contract can help to improve your credit rating. Want to learn more about your credit score and how you can improve your credit rating? Click here for advice, information and a 30 day trial from Experian.

  3. Wi-Fi-only smart devicesThe UK is packed with Wi-Fi hotspots. They’re cheap or they’re free and they’re literally all around! The London Underground, Costa, Virgin Trains, Wetherspoons, local libraries, museums, BSkyB’s “The Cloud” (the largest high street Wi-Fi service in the UK), BT Wi-Fi’s 4.5 million UK Wi-Fi hotspots (formerly BT Openzone) – for the savvy mobile device user, Wi-Fi reliant apps can be used for making calls, checking emails, browsing and messaging.

    Too good to be true? BT say they’ve increased their Wi-Fi coverage by 40% 2012-2013 in the hope of creating city-wide Wi-Fi zones all over the UK, but there are no coverage guarantees just yet.

    For users with a poor credit score who don’t want to use all their PAYG funds on data, public Wi-Fi is great alternative.

  4. Customised contractsIt’s always been the gripe of the long-term contract user that they can’t upgrade their handset earlier without incurring a huge fee. But some clever UK service providers have rehashed the traditional contract and split it into segments to make it easier to pay off handset charges and upgrade early. It means you don’t pay off the entire contract fee to upgrade, just the percentage of the monthly charge that covers the value of the handset. So far O2 and tmobile are both on board.
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