We all, at some time struggle with covering our bills as the cost of living continues to rise and incomes struggle to keep up. And our smartphones are now such a ubiquitous part of the household expenditure they are seen as essential. But what if you’re struggling to keep up the payments?
The National Debtline stated that calls to them had increased 261% since the launch of the first iPhone. And one debt charity estimated that more than 15% of those calls owed more than £1,000 on their bills.
Even back in 2013 the average family of four with two parents and two teenagers would be paying £140 for all to own a smartphone, more than the average UK energy bill.
And remember, when you take out a contract for a smartphone you are, in effect taking out a loan. A stand-alone smartphone can cost you upwards of £500 which would normally be beyond the average family’s budget.
Here then, we look at the do’s and don’ts when struggling to keep up those payments.
If you’ve taken out a mobile phone contract you have committed for a minimum term. But if you don’t pay on time you will be in breach of that contract. This can prompt your provider to chase you for payments and ultimately passing it on to a debt collection company, and that can mean real problems and should be avoided at all costs.
It’s a sad fact that some debt collection companies can be extremely aggressive in getting money owed and can lead to stressful legal action.
Identify the problem
Money is tight, and you know you could miss a payment. Or maybe you already have and received a reminder.
Whatever the reason identify the problem. Is it a one-off, maybe a particularly expensive month? Or is it looking increasingly likely that the problem is going to be on a regular basis.
Can you really afford it?
Its time to be honest. Can you really afford your current contract? It might be time to rein-back on expenditure and get costs in line with your budget. Perhaps there are other areas you can reduce if you think the phone is more important.
When it comes to your phone, check the terms and conditions on your contract for their policies on late payments and service disconnections. You’ll usually find this on your providers’ website.
Speak to your provider
It is generally seen as the golden rule of debt accumulation to contact your provider as soon as possible. Any delays will work against you and generally providers will be sympathetic to your problems and will look to ways to keep you on board. Particularly if you’ve shown you’re proactive and willing to pay something.
Remember, your provider is obligated to work with you to come up with a payment plan based on what you can afford. So, speak to your provider about payment options and come to a mutual agreement on how much you can afford to pay. Don’t commit to more than you can realistically pay.
As said most providers will be sympathetic to your plight but some will only enter renegotiations if you’ve been with them for six months. Others might not at all but it’s worth asking.
If faced with a reluctant provider, then you always have the option to cancel and pay off in one go but be aware of any hidden penalties.
Remember if you’re paying through direct debit you may incur additional penalty charges from both your bank and the provider. It is worth contacting your bank as well as your provider. At least letting them know and again they may be sympathetic and offer repayment plans more suited to your financial position.
Look for cheaper alternatives
It maybe time to downgrade your contracted phone. there are plenty of cheaper alternatives such as Pay-as-you-Go or SIMs-only deals. PAYG is the most flexible allowing you to put your SIM card into any phone and top-up when you can afford it.
Cash in your old phones
When we upgrade many of us tend to tuck the old phone away and forget about it. But they may make you some money that could go towards paying off any debt through recycling options.
Alternatively, you may well look to sell-off your newer smartphone and transfer your SIM to an older model.
There are a number of organisations dedicated to helping people in debt. It is worth contacting them to see if they can assist. They can help put together a budget and identify areas where you’re paying too much.
With some of these organisations you can either do this one-to-one or online.
Contacting your provider
If you’re having problems these are the customer service numbers for the major providers.
EE – dial 150 on an EE phone or 07953 966 250
Giffgaff may not have a customer service line but if you log into giffgaff.com and ask for an online agent they can help
O2 dial 202 from an O2 phone or 0344 8090202
Three dial 333 from a Three phone or 0333 300 3333
Tesco Mobile call on 4455 on a Tesco phone or 0345 301 4455
Virgin Mobile call on 789 from a Virgin phone or 0345 600 0789
Vodafone dial 191 from a Vodafone mobile or 0333 304 0191
For debt advice
National Debtline 0800 808 4000
National Debt Advice 0808 223 4188
Citizens Advice 0345 404 0506
All numbers accurate as at 9 May 2018