The Contacts screen is a central place where you will find all your stored contacts.
Sim - a Contact (phonebook record) of a real world number (having an ISD Code), managed through your phone.
WiFi - a Contact (phonebook record) of another TextApp user (whose number starts with '+T 123'), managed through TextApp.
Details:
Contacts > WiFi Call
Lists and allows you to manage (add, edit, delete) the Contacts on TextApp. On the screen, you can see the TextApp user contact(s) you added. This is handy when you want to call or message any TextApp user without paying anything per minute or per text.
Contacts > Sim Call
Lists your Phone contacts and allows you to manage (add, edit, delete) them. On the screen, you can see the Contact(s) from your phonebook. This is handy when you want to call or text any user on his/her real phone number. When you make a phone call or send a text message using 'Sim Call' option, please be aware that your Credit balance will be used. PS - receiving a call or text is definitely free.
In case you are looking for options to recharge your Credits, here is the article.