There are hundreds of mobile phone deals available online, they often come with lots if perks like free Apple music, BT sports to free gifts like a PlayStation or an Xbox. The most common benefit and perk you will find is mobile phone deals with cashback. Most consumers will understand how cashback works but there are a few terms that often appear that some consumers will find confusing.
What’s ELR or Equivalent line rental?
When calculating the line rental over the 24-month period most sites use the term equivalent line rental. This means the cost of the line rental minus the amount of cashback and then broken down into the final cost over the 24-month period. For example.
Let’s buy an Apple iPhone 6 with no upfront cost. The original monthly tariff is £22 per month with 4GB of data. This deal comes with £25 cashback.
The original total phone cost without cashback over a 24-month period is £528. Divided by 24 this comes to £22 per month over the duration of the contract.
Now, we take off the cashback of £25 which reduces the total phone cost to £503 over the 24-month contract. Divided by 24 the ELR or Equivalent line rental is now £20.95 per month. So, the equivalent line rental is the monthly cost of the phone after the cashback has been removed from the total phone cost.
What’s a mobile phone deal with Auto Cashback?
Auto cashback is the most common form of cashback. When you purchase a mobile phone with auto cashback the company you bought the phone off are paying the cashback. This is typically paid into the customers account via cheque or bacs 90 days after the purchase of the phone.
What’s a mobile phone deal with redemption cashback?
Redemption cashback is paid out to the consumer over the duration of the contract. When you purchase a mobile phone with redemption cashback you will have to login to a system and upload your bills to confirm you are up to date with payments. This is typically done over 6/9/12/18-month period.
Are mobile phone deals with cashback a good idea?
Its great to get something back when you purchase anything. Matching the right cashback deal with desired amount of data is very important. You may save money now but not in the long term. With bill capping you can now stay in control of your monthly spend.