Why pay as you go is making a big comeback

Mother and daughter taking self portrait during Christmas

One of the biggest traditional Christmas tech splurges of upgrading the mobile contract to a higher tariff is being put on hold this year by many in favour of the humble pay-as-you-go phone.

For those whose first phone was a PAYG, this might not sound appealing. Paying per text (double if you went over a few characters), watching the credit go down with each passing minute on a call, the fear of what it might cost to log onto the Internet, not to mention the cheaper handset – who would want to go back to that?

Well, times and deals have changed. With fantastic value PAYG bundles offering the same kind of limit on calls, text and data that you can expect from contract phones, going contract-free is now a financially beneficial solution than a step down. Especially so for those who feel their actual usage is less than the data and limit being paid for, or those wanting to have a more realistic control over their bill.

And it is also a great excuse to enjoy the festive period by not overspending on a handset - after all, Christmas is supposed to be the time to connect all your family, no matter where they live, so a PAYG handset allows that connection to start as soon as it is unwrapped.

The best part is you don't have to step out completely of the contract culture to do so. The option is there to stay with your provider when the contract comes to end, but downgrading to a lower tariff by holding onto the old handset.

This makes it easy to get a second phone on PAYG and still end up paying less for both phones combined than the average monthly tariff for upgrading to a data and app-heavy new phone.

Phone providers realise that being financially savvy doesn't mean people will settle for a visibly outdated model, and the range on offer ensures the handsets look and feel every bit as good as one you're tied down to.

The old-fashioned pay per call, text and date usage is still there – much cheaper than it used to be, but only really worth it as an emergency back-up, or for occasional use such as on holiday or at festivals.

The PAYG bundle is generally the best option, which usually works on a rolling contract – meaning you buy the minutes, texts and data for the month ahead, then top up again at the end of it. The average deal at the most basic rate of ten pounds a month will get you around 150 minutes, unlimited texts and 500MB of data. A pay-as-you-go SIM can be put in any unlocked phone, so you can still have the phone of your dreams without having to sign up for the long haul. And, in most cases, even keep your old phone number.

And there are even providers now going a step further by differentiating their PAYG offering from the norm. Vodafone's PAYG1, for example, allows people to put a cap of £1 per day on their spending. They simply pay for what they use up to £1 per day – after that, it is free for the rest of the day until midnight.

Up until recently, only an option for those with credit history issues or people who rarely use mobiles, the PAYG is now gearing up to be one of the most fashionable yet cost-effective tech solutions this Christmas.

Vodafone are currently offering amazing value handsets under the tree for £15. Show your love by choosing from the Vodafone Smart First 7, Vodafone Smart E8 or Doro 5030. To opt in to PAYG1 and cap your payments at £1 per day, call 2345 or text GETPAYG1 to 40514 free from your Vodafone mobile.

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