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Prepaid vs Postpaid Mobile Plans: What Works Best for You?

a woman holding a credit card in one and a cell phone in the other

The main difference between prepaid vs postpaid plans comes down to when you pay, just as the names imply. With prepaid plans, you pay for your phone service up front, while postpaid plans have you pay for your service at the end of a given billing cycle.

But which one should you choose? There’s no one right answer, just the answer that makes the most sense for you. We’ll break down prepaid and postpaid mobile plans in detail and explore their benefits so you can make a more informed decision. 

Want to compare the best phone plan deals among postpaid options? Our Plan Finder is free and unbiased. It can show you the best plans from top carriers based on your criteria.

What is a Prepaid Mobile Plan?

As we explained above, prepaid mobile plans are plans that let you pay for your mobile service upfront and in full. Many prepaid phone plans let you pay several months to a year in advance, which is nice for anyone who wants to pay one lump sum and not have to think about bills. Prepaid plans are also sometimes called no-contract plans, though postpaid wireless no-contract plans are becoming more widely available.

For example, you can choose a plan that comes with 5 GB of data and unlimited talk and text that costs a set amount per month. You pay that at the start of the billing period, and then you get access to those benefits. If you stream too much Netflix on your phone the first week of your prepaid mobile plan and eat up all your data, the network will throttle your internet speed until the next billing cycle, or even cut off your data entirely. 

That can be frustrating, but most prepaid plans allow you to purchase additional one-time data packages if need be. 

Most prepaid plans are SIM-only, meaning that you don’t pay for the phone, just the coverage from the carrier. However, you may find some prepaid mobile plans that are packaged with phones, so you can pay for a new phone and immediately get cell service for a certain amount of time from a partner cell carrier. 

T-Mobile, Verizon, and AT&T, among others, offer prepaid service plans. They also offer postpaid service plans (more on that later).

What Are the Benefits of Prepaid Mobile Plans?

The main benefits of prepaid mobile plans are flexibility and control over your spending. Simply put, it's easy to purchase a prepaid mobile plan for a given timeframe. Then, when you finalize the purchase, you know exactly how much you've spent on your cell phone bill for the short-term future.

That can make budgeting much more manageable, plus prevent you from overspending by accident. Furthermore, prepaid mobile plans make it easy to switch your mobile provider without much hassle. All you have to do is purchase a new SIM card and pay any accessory fees associated with switching to a new cell phone company. If you don’t have a good credit record, no worries; most prepaid plans don’t require one since you’re paying upfront.

Who Are Prepaid Mobile Plans Best for?

Prepaid mobile plans are a great fit for anyone who wants predictable cell phone bills and wants to save a little money. If that’s you, you may find prepaid mobile plans more suitable and cost-effective than postpaid.

What is a Postpaid Wireless Plan?

Postpaid mobile plans are the opposite of prepaid mobile plans. With a postpaid plan, you receive a bill for a set monthly fee that you pay at the end of your billing cycle.

There are two types of postpaid plans, capped plans and unlimited plans. While unlimited plans are the norm among postpaid carriers, some wireless providers also offer capped plans (aka by the gig plans). With capped plans, there are data limits and fewer perks, but typically lower prices. With unlimited, you won’t get any surprise charges since it’s impossible to go “over” any limits, you'll also enjoy more perks and better phone discounts. Of course, these advantages mean higher monthly fees.

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What Are the Benefits of Postpaid Wireless Plans?

The biggest benefits of postpaid mobile plans are the extra perks and the ability to buy a top-line phone on credit. Think of it as the bundle option. 

For example, the “Big Three” carriers (AT&T, Verizon, and T-Mobile) offer you the option of buying the latest iPhone model as part of your postpaid plan. But instead of paying for it upfront, you can make monthly payments over 24 or 36 months. Depending on the latest promotions and the value of your trade-in phone, you may even qualify for a free phone or a deeply discounted one from these carriers. If so, your credits will be applied over 24 or 36 months. In either case, this means that if you decide to switch to a different plan, you’ll be charged for the full remainder of what you owe for the phone at that point. 

Most of the big cell carriers and companies also offer tons of perks and special features for signing up for postpaid mobile plans. These include streaming service subscriptions, special phone deals, and offers, in-flight Wi-Fi, faster streaming, hotspot data allowances, free upgrades after a certain number of months on your plan, and much more. You also have the option of adding devices such as smartwatches and tablets onto the plan, which you can’t do with prepaid plans. Families take note—it can also be more cost-effective to add several lines, compared to prepaid plans.

If you're looking for a comprehensive cell service package, you'll be more likely to find it in a postpaid mobile plan compared to a prepaid mobile plan.

Who Are Postpaid Mobile Plans Best For?

Postpaid mobile plans are ideal for folks looking for the best deals on the latest phones or for those who want to pay off a mobile phone over time. These plans can also help you save money on perks like streaming services. Since postpaid plans let you add multiple lines and often offer discounts on additional lines, they can be a good option for families.

Postpaid mobile plans can also be great for those who are very disciplined with data usage if you choose a limited data plan. 

SIM-Only Mobile Plans

Knowing the difference between postpaid, prepaid, and SIM-only mobile plans is important. Essentially, a SIM-only plan is one in which you already have a phone; you just need to buy service. Most prepaid plans are SIM-only, but more and more postpaid plans allow you to bring your own device (BYOD) and pay only for the coverage, often for a substantial discount.

If you reach the end of a postpaid phone contract and fully pay off your new device, your contract transitions into a SIM-only mobile plan since you only pay for the cell service, not the hardware. 

If you BYOD, SIM-only mobile plans can be advantageous if you want the benefits of a postpaid mobile plan and don’t need or want to switch your mobile device.

How To Choose Between Prepaid vs. Postpaid Mobile Plans

If you use roughly the same amount of data each month, and if your cell usage is very consistent, a prepaid mobile plan could be right up your alley. 

On the other hand, if you’re looking for the best phone deals on the latest devices, you need multiple phone lines, or you want extra perks like streaming services, a postpaid mobile plan may be the better choice.

The Bottom Line

Both prepaid and postpaid mobile plans have benefits. To determine which you should pick, take a look at your budget, personal preferences, and how you use data and cell services. The long and short of it is that with prepaid plans, you pay for your phone service upfront, and with postpaid plans, you pay for your service at the end of a given billing cycle. 

Ultimately, only you can answer the question of which is best for you, but Navi can point you in the right direction. Our free, unbiased Plan Finder can help you find and compare cell phone plans based on your criteria in seconds.

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