One of the first dilemmas every mobile user has to face is whether to go for PAYG or a phone contract. Pay-as-you-go or PAYG simply means that you need to purchase your credits in advance in order to use your phone's services, while a mobile contract requires subscription to a postpaid plan, with a predetermined amount to pay for every month. Because there's no right or wrong option for everyone, the following guide can help you decide between the two options.Cost
When comparing tariff costs between PAYG and mobile contract, you'll find that contracts generally offer cheaper tariffs. You can also get unlimited packages for much less as compared to PAYG, so if you're a heavy user, you'll definitely find mobile contracts more cost effective over the long haul.Convenience
When it comes to convenience, a mobile contract definitely gets the upper hand, because you don't need to worry about buying credits before using your phone's services. With a mobile contract, you can use your services continuously without having to worry about running out of credits. Of course, you need to keep your payments up-to-date in order to avoid disconnection.Commitment
With PAYG, you only have to purchase your credits as needed. With a mobile contract, on the other hand, you will be required to commit to monthly payments for a specific period of time, usually for about 18 to 24 months. It's fine if this is something you'd be comfortable in, however, keep in mind that you will be locked to that network and will have to pay for an expensive termination fee if you want to opt out early. Furthermore, if you want to switch networks or travel abroad, the commitment with the service may cause some problems.Credit
Your credit score will be another factor in choosing between PAYG and contract. Basically, you can obtain PAYG easily no matter what your credit rating is. But while your options for a mobile contract may be limited when you have poor credit score, there are still some deals where you may be able to qualify. However, you may not have much of a choice when it comes to the handsets included, and the monthly costs may be higher than those offered to customers with good credit.
Still, a mobile contract may actually be able to repair your damaged credit, provided that you pay your monthly bills on time. If this is something you can comply with, a mobile contract may be worth considering.New Mobile
Definitely, one of the most common reasons why people sign up for a mobile contract is because of the new handset included. If this is something that you want, and don't have the cash to pay for your own device, you might want to consider subscribing to a contract. However, if your credit score is very low, keep in mind that your handset options will be very limited to the ones that your provider will suggest. On the other hand, if you have good credit rating, you can enjoy the luxury of choosing any phone that you like and have the cost subsidised all throughout the contract's term.Risks
There is very little risk, if any with a PAYG. You only have to pay for what you use, and at the same time you can choose not to top up if you don't need the credits yet. The only downside is that your service would stop once your credits have run out, which can be very upsetting if you need to place important calls.
A mobile contract, on the other hand, lets you enjoy the convenience of using your mobile services on a postpaid basis. Unfortunately, because there's no limit to how you want to use your phone, this also runs the risk of going over your allocated credits monthly, and paying in excess of what you have previously planned.