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Sim-only vs pay-as-you-go: Which makes the most sense?

SIM only vs pay as you go - featured. Tesco Mobile, Smarty and Voxi SIM cards on a wooden table next to a nano SIM

Two SIM options that are very different under the surface

If you need a SIM card for your phone, you have two choices: sign a contract for a “SIM-only” package, or get a pay-as-you-go (PAYG) SIM and be free from the shackles of a contract.

Neither option is better or worse than the other and the best mobile networks tend to offer both. However, before making a decision, you should be well aware of what each option entails, and whether your specific needs mean one suits you more than the other. Let’s find out.

The pros and cons of SIM-only plans

A SIM-only contract is near-identical to a regular mobile phone contract. The only real difference is that there’s no subsidised handset included as part of the deal. This is the main advantage of a SIM-only plan. If you prefer to buy your phone outright, or you don’t see the need to replace your existing handset with a new one with every contract cycle, then a SIM-only plan will be cheaper as a result of not having to pay for a handset; but you’ll retain the advantage of lower-cost contract data and voice rates.

The general caveats of mobile contracts still apply, though. For instance, you can’t just switch providers or end your contract without paying some sort of penalty. Note that you could also run over your monthly allocation, and end up with a bill that’s more than you expected.

On the upside, you don’t have to worry about running out of credit at inconvenient times as you might with a pay-as-you-go SIM. As such, if your phone service is mission-critical, or you’re a heavy user likely to benefit from lower rates – and you don’t need a new handset – then this will probably be the right option for you.

Do be aware that SIM-only plans can be subject to mid-contract price increases, which can change the value proposition compared to pay-as-you-go. Then again, PAYG rates can also be increased – here, though, you at least have the option to switch providers without incurring any charges.

READ NEXT: Best SIM only deals

The pros and cons of pay-as-you-go

With a pay-as-you-go SIM, you pay only for what you use. You load your account with credit, thereafter using that credit to fund data bundles or voice-calling minutes.

If you’re a light user of mobile data or voice services, then this will be the most cost-effective solution for you. Those who spend most of their time connected to Wi-Fi at work, school or at home, are better opting for a pay-as-you-go SIM.

The downside with this option is that you might find yourself running out of account credit at the most inopportune moments, which means you’ll have to keep a closer eye on your account balance. PAYG may also work out more expensive on a per-minute or per-megabyte basis, making it unsuitable for heavy users, for whom it may prove cheaper in the long-term to get a contract.

For those concerned about passing a credit check, again, a PAYG SIM is a good option to access mobile services.

According to Steven Athwal, founder and managing director of The Big Phone Store, one of the main caveats with pay-as-you-go SIM cards is that they may not be quite as advertised:

“In the UK, it’s become a lot more difficult to find SIM cards that are genuinely ‘pay as you go’. A quick google search for ‘pay as you go SIM’ will mostly show you ‘no contract’ SIM cards that use a bundle system, where topping up each month will give you a package that includes a set amount of data, minutes and texts.

In many cases, these packages have a short expiration date – you either have to use them before the end of the month, or they disappear forever. While you avoid being locked into a monthly contract, and can leave or change your monthly spend at any time, you’re still often paying for much more than you need.”

We don’t believe this completely discounts pay-as-you-go SIM cards or their unique advantages, but it’s always worth reading any terms and conditions carefully, even if you’re not signing a contract.

READ NEXT: Best pay as you go SIM deals

The choice is yours

As long as you carefully consider the terms and conditions then, both SIM-only and PAYG plans are equally decent solutions if their advantages align with your needs. Those who require a new handset – since one won’t be available with either of these SIM options – should check out our top picks of the best budget smartphones.

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