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Don’t Pay The Penalty When You Cancel A Contract

Don’t Pay The Penalty When You Cancel A Contract

by Mr. Moneysaver · Jul 15, 2020

Looking to get out of a contract for a service such as a mobile phone, TV or broadband? Generally speaking it’s a smart move with the “switch and save” message having really caught on and handed some power back to consumers, particularly with the emergence of comparison websites that allow you to search for cheap quotes online on a range of financial products and services.

However, if you’re looking to make the jump mid-contract you might pay the price.

What’s the problem?

Most contracts will carry cancellation fees. For example, if you have a TV subscription you may have to give 30 days notice to cancel; while a phone provider may continue to charge you via direct debit if you had a fixed term contract in place. So what can you do to stop yourself being charged?

The first step is to know the terms of your contact – and particularly whether you’re on a fixed term contract or not. Some contracts are now increasingly long as they’ll offer better monthly rates in return for you signing up for the long-term. So if you’re facing a cancellation fee for leaving a contract it may be cheaper to wait the rest of the contract out and then switch when it’s up for renewal. Alternatively, you may be better off paying the penalty and switching anyway, as you may still save money overall – typically you’ll have to pay the recurring monthly charge until the fixed contract period was due to expire.          

Another smart idea is to contact your existing provider before switching. Not only should your current provider be able to outline the terms of your deal, but it may even be willing to offer you better terms just to get you to stay onboard.

A change would do you good

When you speak to your provider, ask if you can potentially downgrade or change your package. With some contracts you may only be able to do this after a certain time – but at least if you contact the company it may be able to help.

Of course whenever you decide to switch you should ensure you’re getting the best available deal. Comparison websites are a fast way of comparing quotes from different providers but make sure you’re comparing them like-for-like – i.e. if you’re looking for a new broadband deal don’t leap on an offer just because it’s cheaper, make sure you’re getting the same broadband speeds and download caps too. Also remember that some providers exclude themselves from comparison websites, so you may still find it is worthwhile approaching them directly.

Finally, remember to look for voucher codes before you make the switch. Voucher codes can drive down the cost of everything from mobile phones to utilities.

Filed Under: Broadband, Electricity, Gas, Home Heating Oil, Home Phone, Household Bills, Insurance, Mobile Phone, Mortgages, Personal Finance, Property Tax, TV

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