Stop Spiralling Bills with a Capped Contract

by Brandon Ackroyd - , Last Updated on June 29, 2016, How To Guides

Let’s face it, mobile phone bills can get expensive, particularly if you’re not always careful about who you’re calling, how often, and when. If you’re on a budget then a Pay as You Go phone plan allows you to control your phone spending more carefully, but PAYG prices do tend to be more expensive than contract prices, so you won’t necessarily be saving in the long run. Fortunately, with some operators there is a mid ground option, what we call a capped contract. We’re here with everything you need to know about capped contracts so you can avoid scary phone bills!

What is a Capped Contract?

We’ll start with the basics. A capped contract is a traditional mobile phone contract where you pay a certain amount for each month of service for however many months the contract covers. However, unlike regular contracts, a capped contract allows you to put a limit on extra spending. Wait, contracts have extra spending? Yes, they do, and it’s expensive too…

If you sign a mobile contract you’re agreeing to pay a certain amount of money for a certain amount of service. Maybe that’s, for example, £20 a month for 200 calling minutes, unlimited SMS, and 1 GB of mobile data. Go over those limits though and you’ll find that your bill is more than £20, since the operator will start charging you premium rates for going over your calling plan limits. What a capped contract does is limit the extra amount you can be charged.

The Pros and Cons

The biggest pro of a capped contract is that you won’t be getting any scary phone bills. You will determine a maximum amount that you can be charged and your monthly phone bill will never exceed that amount. There is a down side though. Once your maximum spending limit has been reached your phone service will be discontinued until a new billing cycle starts, so you might find yourself unable to call or text (though you should be able to receive both calls and texts). It’s up to you whether or not this is acceptable, but on the whole capped contracts are a great idea for kids’ phones, or for adults who might need to be a little more careful with their mobile spending…

Capped Contract Options

Not all UK operators have the option of capped contracts. In fact, only four operators have truly capped contracts. BT has automatically capped contracts, and simply by signing up for service you’ll have a spending cap of between £5 and £45 a month, depending on your credit history and the kind of contract you sign. However, you can easily change this by going to BT’s web page and entering your account, and can set your cap to be as low or high as you like. Tesco Mobile has a similar programme where you get a spending cap by default and can change it to anything between £2.50 and £40 by going to your online account page.

There are two smaller operators that have capped contracts by default as well. iD Mobile has a default £5 cap on spending over your regular monthly bill (but this doesn’t include the TakeAway or GoTo plans). And LIFE Mobile also has a default £5 cap, but you can lower that to as little as £1 if you want to. So much for capped options, what about offerings from other operators?

Other Spending Limit Options

Whilst other operators don’t have standard capped contracts, there are a few alternative options out there that might protect you a little against over spending. With TalkMobile there’s an automatic £50 cap on all extra spending, which is a pretty high limit, but is better than nothing…

Three does not have capped contracts, but does allow you to control phone usage rather than phone spending. Log into your online account with Three and head to the allowances menu and you’ll find an option to block calls once your monthly calling minute limit has been reached. You will also find an option that blocks calling to expensive premium numbers (like the ones used to vote for X Factor…), which may help control spending as well…

What About Other Operators?

Unfortunately, if you’ve got a contract with another UK operator then you really don’t have the option of capping your monthly spending through the operator themselves. But if you’ve got a fairly modern smart phone then there is another option that can protect you, though you’ll need to do a bit of work to set your phone up…

Many phones have limit features that allow you to set calling minute, SMS, and mobile data limits on the phone itself. You’ll need to have a look around in your settings menu and set up the limits, but in most cases you’ll be able to at least limit expensive mobile data. However, this method is not completely foolproof! On most phones once you reach a set limit you will still be able to spend more by calling, texting or surfing. Your phone service will not be cut off, but you will sound an alarm or get a notification warning you that you’ve reached your limit. Of course, this can work in the same way as a capped contract, but you will need to be responsible, so it’s maybe not the best method to stop younger kids spending too much.

Your final option is to just dump the contract altogether and go for PAYG instead. As we mentioned before PAYG prices tend to be higher per calling minute, text and MB of data than contract prices are. But if you’ve got a real problem with overspending on your monthly mobile bill, then even with higher prices the threat of having your service cut off because you’ve run out of credit might be enough to help you save money anyway…

Photo Credit: Visual Hunt