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

When you’re looking for a new mobile phone plan, you don’t necessarily have to lock yourself into a years-long contract. Sometimes, you can opt for a prepaid or postpaid mobile plan instead.

But what exactly are prepaid phone plans and postpaid mobile plans, and which one should you choose? Turns out, the answers to these questions can be a little more complex than you initially thought. Today, let's break down prepaid and postpaid mobile plans in detail and explore their benefits so you know which one to choose.

What Are Prepaid Mobile Plans?

In a nutshell, prepaid mobile plans are periods of mobile cell service you pay for ahead of time. You pay for the service upfront and in full. For example, if you want three months of cell service from a cell carrier, you pay for the three months of service in a single, lump sum payment. These are also called no-contract phone plans.

As a result, you don’t have to pay any monthly bills when using prepaid mobile plans, except if you go over data allowances or other limitations. In those cases, you’ll receive a bill at the end of your contract period requesting you to pay any overage charges you may have incurred. This is still a far cry from “bill shock,” which occurs when customers are surprised by their bills at the end of the month.

Prepaid mobile plans usually operate on fixed "recharge cycles." In essence, you pay for one month, three months, six months, or 12 months in advance rather than "random" sequences of days, like 21 days (though there are some rare exceptions). Many prepaid mobile plans are also 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.

What Are the Benefits of Prepaid Mobile Plans?

There are many benefits to prepaid mobile plans, like 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. In addition, prepaid mobile plans' flexibility can be beneficial if your income fluctuates monthly. If you don't have enough money to pay for a cell phone bill after your current term expires, you don't need to worry about your cell carrier automatically billing you.

Furthermore, prepaid mobile plans make it easy to switch your mobile provider without as 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; many prepaid SIM cards don’t require one.

Who Are Prepaid Mobile Plans Best for?

Prepaid mobile plans are best for various people, not just senior citizens and students. In fact, anyone who wants to have predictable cell phone bills and is confident that they know their data usage habits by heart could find prepaid mobile plans more suitable and cost-effective than the alternative.

That said, prepaid mobile plans are excellent for college students, allowing them to save money between paychecks. If students don’t have enough money for cell coverage for a given month, they won’t automatically be billed and face late payment charges on their credit cards. Senior citizens might also benefit from prepaid mobile plans since they tend not to use their phones as much as younger individuals.

You may further wish to sign up for a prepaid mobile plan if you want to save money overall. The longer the time frame you pay for, the cheaper your plan will be on a per-month basis. For instance, it's cheaper, in the long run, to pay for a 90-day prepaid mobile plan than a 60-day mobile plan since the cell carrier will give you a per-month discount baked into your plan agreement.

What Are Postpaid Mobile Plans?

Postpaid mobile plans are the opposite of prepaid mobile plans – you receive a bill at the end of your service, after which you’ll have to pay the incurred charges.

Postpaid mobile plans usually have set charges or rates you know in advance. For instance, say that you need to pay (hypothetically) $50 per month for cell service from your favorite carrier. On top of that, your postpaid mobile plan contract might include fees for data allowances, hotspot usage, or data overages.

Most cell phone plans are technically postpaid because consumers get a bill at the end of each billing cycle. However, postpaid plans without contracts are becoming more common. These allow cell users to "pay as they go" instead of having to be on the hook for costs they don't take advantage of.

Practically all postpaid plans come with unlimited talk and text as standard features. Therefore, you can pay for whatever you need or use in a given month. This can result in some bill variation, making your costs a little less predictable.

If you're curious about finding the top postpaid wireless plans, check out our widget below. We comb through hundreds of plan options each day to get you the best deals for your needs.

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What Are the Benefits of Postpaid Mobile Plans?

Postpaid mobile plans also come with advantages and benefits to keep in mind. With postpaid plans, you can purchase expensive devices on credit and make regular monthly payments toward them over time. That’s why many consumers use postpaid mobile plans; they are the only practical ways in which the average American can buy a new phone when it comes out.

Postpaid mobile plans also allow you to only pay for what you use in terms of data. If you sign up with the right cell carrier, you can rest assured that you’ll only pay for the data you use, not pay a flat fee for a data allowance that you may or may not burn through in a given month.

On top of that, with postpaid mobile plans, you get access to a central account. You can then link multiple phones or SIM cards to the same account, so all of your billing information stays in one place. For this reason alone, lots of families prefer postpaid mobile plans, especially if they have multiple lines in their family.

Lastly, the big cell carriers and companies 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, fast streaming, hotspot data allowances, and much more. 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 great for a variety of people, especially those looking to pay off a mobile phone or new handset. Many big cell carriers offer special deals where you can purchase a mobile phone and pay it off over 24 or 36 months, so you only have a low monthly payment instead of having to pay a high lump sum payment of over $1000.

Postpaid mobile plans can also be great for those who are very disciplined with data usage. If you don’t continually go over data caps, you won’t face a lot of overage charges or other fees. Furthermore, if your cell usage varies monthly, a postpaid mobile plan could make the most sense, as you may pay more in one month but less in another month.

SIM-Only Mobile Plans

Knowing the difference between postpaid and SIM-only mobile plans is also important. SIM-only mobile plans are technically types of postpaid mobile plans. However, you must bring your handset to the cell carrier – the carrier doesn’t provide you with a new phone.

Actually, 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. 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 (whether it’s because you recently bought it, you are happy with its features, etc.).

How To Choose Between Prepaid vs. Postpaid Mobile Plans

Both prepaid and postpaid mobile plans can be beneficial or the right choice. To determine which you should pick, take a look at your budget, personal preferences, and how you use data and cell services.

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. That’s doubly true if you want to keep a close eye on your cell phone expenditures and don’t want to be surprised by your cell bill each month.

On the other hand, if your data usage varies from month to month, or if you need to afford a new cell phone by paying a low monthly rate, a postpaid mobile plan is probably the better choice. You should also go with a postpaid mobile plan if you want to take advantage of the perks and bonuses offered by the top cell carriers.

Try Navi Today

As you can see, both prepaid and postpaid mobile plans have serious advantages. 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. Either could be the superior choice, depending on your budget and unique needs.

If you’re still having trouble finding the perfect phone plan, Navi can help. Our Plan Navigator service can connect you to the best, most affordable phone plans, whether you’re after something prepaid or postpaid. Check out our Plan Navigator service today!


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