In today's economic climate, a lot of people are looking to save money. With mobile phones being a necessity for most and monthly bill costs taking money out of your pocket, one way that you might be able to save is by compromising with your phone plan. SIM only deals may be able to save you money, they're certainly cheaper than other kinds of phone plan, but does that mean that they're the right choice? Today we're talking about all you need to know about SIM only deals. Is this the right choice for you? Read on to find out.

What is a SIM Only Deal?

SIM only deals are pretty simple. The phrase refers to the kind of phone package that comes with no extras. Because there are so many mobile phone operators on the UK market, and therefore a lot of competition, operators offer a lot of incentives to try and sign up new customers. However, you often end up paying extra for those incentives, as we'll discuss below. A SIM only deal means that you go to the operator and sign a contract for the calling plan that you want, with calling minutes, text messages and a data plan if you have a smart phone, and then you receive a SIM card that you can put into any phone. No free phones, no hardware, just the SIM card.

iPhone SIM Only Deals are Different...

Given how popular iPhones are, it's important to note that iPhone SIM only deals are different from regular SIM only plans. Because iPhones use a different kind of SIM card, and iPhone users generally have different needs from other phone users, most mobile operators have special iPhone SIM only deals. This doesn't mean that the information below doesn't apply to you, it does. But if you own an iPhone, you need to keep in mind that you need to look for iPhone SIM only deals when shopping around, not regular SIM only deals.

How Do SIM Only Deals Save Me Money...

SIM only deals save you money for a very simple reason: the mobile operator isn't subsidising a hand set for you. Whilst free phone contract deals are very tempting, and many people sign up for them, what most people don't realise is that the free phone really isn't free at all. This is easy to work out if you look at the figures.

Say you're looking at a SIM only deal that offers you a hundred calling minutes, two hundred text messages and 1 GB of data allowance for £15 per month. You'll probably sign a twenty four month contract (standard with most operators, though some have twelve or eighteen month contracts), which means that over the course of two years you'll pay a total of £360. Not bad.

Now look at a plan with the same operator, the same number of calling minutes, messages and data allowance, but with a “free” phone. The monthly cost of this plan will be more expensive, say £25 per month. That means that over the two year contract you'll pay £600. The difference between SIM only and plan plus phone is £240. Of course, as long as the free phone is worth more than £240, that's fine. But it won't be. You will pay more than the retail cost of the phone for the convenience of not paying cash up front, that's how operators make money on these deals. So, if you skip the incentive free phone deals, you absolutely pay less for your phone bills.

Any Other Benefits?

This is one more thing that might be important to you. By not getting your phone from the mobile operator, it means that most likely your phone will be unlocked. Phones sold by mobile operators are nearly always locked to that provider, meaning that the phone won't accept a SIM card from another operator should you decide to switch companies. You can get phones unlocked, but it will cost you money. By getting your phone elsewhere you should be able to use it with any operator you want.

When Should I Not Get SIM Only?

In order to go for a SIM only plan you need to have a phone. If you already have a mobile phone that you can use (and you've checked that it's unlocked and will accept a new SIM card, or know that it's locked to the operator that you'll use for SIM only) that's fine. If you're willing to go out and buy a new phone elsewhere, again, that's fine. However, if you don't have a phone, and you don't have the cash to buy one right now, then there's no point going SIM only. You might as well go for an incentive deal with a phone. You might pay more, but you'll have the phone that you need and the calling plan too. But if you have the cash, it's going to be cheaper for you to buy the phone immediately and then go SIM only.

No Incentives?

It's not exactly true that there are never incentives with SIM only deals. Some companies run them. Generally, these incentives are in the form of free minutes added to your plan, or maybe discounted payments for a few months. Half price payments for the first three months of your contract is a popular incentive deal. By all means take these incentives if you can get them, there's no harm in having extra phone services, whether that's minutes or messages.

SIM Only is a Contract...

Some people make the mistake of thinking that SIM only deals are not like regular contracts, when, in fact, they are. You will be expected to sign a contract, usually for two years, you will have monthly payments, and you will have to pay if you wish to break your contract. SIM only deals have the same contract requirements as any other kind of monthly phone plan, so if you don't want to sign a contract, or you can't sign a contract, then SIM only deals won't be for you.