I don’t want to sign a new contract - what now?

Our mobile expert says...

If you signed a contract to get a cheap iPhone, then chances are you've been paying for your handset through an inflated tariff.

This means that switching mobile phone tariff could save you a significant amount each month. If you don’t want to sign a lengthy new contract, you have two options; a rolling 30-day deal or a pay-as-you-go sim card.

30-day contracts

All the major mobile phone providers now offer rolling 30-day contracts, aimed at giving you a bit more for your money.

Because you're not getting a “free” mobile as part of your deal, you'll pay less each month and won’t have to commit to your network provider for 12, 18 or 24-months.

So, if you see an offer that’s simply too good to resist, or a new phone comes out and you decide that you do want to sign a new contract in exchange for a discount, you'll be free to do whatever you want. You can cancel your 30-day deal whenever you want.

These deals take into consideration everything you need from your mobile tariff - calls, texts and an internet allowance - and networks offer a range of different deals to suit different users. For example, the One Plan from Three mobile offers some of the best value for money on the market. For £25 a month you get:

• 2,000 anytime, any network minutes
• 5,000 texts
• All-you-can-eat data
• 5,000 Three-to-Three minutes

Rolling contracts cost from as little as around £10 a month so the only thing you really need to do is compare mobile deals and find the right one to suit your needs.

A further benefit that a 30-day contract offers over a pay-as-you-go sim is the fact that you won’t need to top-up. However, if you're prone to running up big bills, you might like the budgeting benefits of pay-as-you-go.

Pay-as-you-go mobile deals

Pay-as-you-go tariffs have evolved in recent years and now offer far more for your money. Operators like O2 mobile and Orange mobile in particular offer customers a wide range of added extras and benefits, including 2-for-1 cinema tickets, 10% of your top-ups back every three months or free international calls.

These days, pay-as-you-go doesn’t always mean you really pay for what you use, when you use it. For example, O2 Pay & Go customers can choose from a variety of different allowances when they top-up. These include:

• Text and Web: Up to 300 texts, 500MB data and unlimited Wi-Fi when you top-up £10 a month
• Favourite Place: Up to 500 minutes to O2 mobiles and standard UK landlines from your chosen postcode when you top-up £10 a month
• Your Country: Up to 50 free minutes to any international mobile or landline when you top-up £10 a month
• O2 Unlimited: Free O2 to O2 calls and texts when you top-up £15 a month
• Simplicity: Unlimited texts for £7.50 a month
• Text and Web for BlackBerry: Up to 500 texts, 500MB data plus BlackBerry email and unlimited Wi-Fi when you top-up £15 a month

As you can see, even pay-as-you-go has become as flexible as a contract with something for every type of user and every budget.

While these tariffs have become better value for money, you do need to be aware that once you run out of credit you won’t be able to make calls, send texts or surf the web outside of any “free allowances” you've received.

Some operators, like Orange, do offer a “reserve tank” of credit in case you really need to make a call or send a text, though anything you use will be deducted from your next top-up.

Although it can be frustrating having to top-up before you can use your phone again, this will stop you running up big bills and can make a great budgeting tool if you're trying to keep an eye on your finances.