3 FAQs about mobile phone contracts
Looking to upgrade your mobile phone to the newest shiny version? (We hear there’s a new iPhone coming out…). Before you sign on the dotted line, we’ve answered three commonly asked questions about mobile phone contracts below.
1. CAN I CANCEL MY PHONE CONTRACT AT ANY TIME?
While most service providers will allow you to cancel or terminate your plan at any time, most will require you to pay out the full remaining cost of your mobile handset and may charge you an early cancellation fee. For more information, these terms and fees are outlined in the Critical Information Summary of the contract.
2. DO I REALLY GET THE PHONE FOR FREE?
Unfortunately, no. If you look at your monthly bill, you’ll see that your payment is broken down into parts. These parts include your monthly plan (calls, texts, and data), your handset, and other fees and charges (such as insurance and international roaming). Instead of paying for your phone in full upfront, the cost is spread out over the term of your contract.
3. CAN APPLYING FOR A NEW MOBILE PHONE CONTRACT IMPACT MY CREDIT SCORE?
Short answer: Yes!
Long answer: A post-paid mobile phone contract is essentially credit. You’re getting access to it now and paying for it later. Your service provider may do a credit check on you because they want to make sure you can afford the repayments and are comfortable that you will pay your debt on time. This credit check will appear on your credit file as a credit enquiry and this can impact your credit score.