In order for the phone company to provide you with the right service, they will ask you whether you are interested in a postpaid or prepaid plan. Some people might already know which one they want, but others may not. If you fall into the latter category, you should be aware of what each plan covers in order to decide which is best for you.
What is meant with postpaid and prepaid?
Prepaid, also known as pay-as-you-go, means that you have to spent some money before making phone calls. You buy a certain amount of time, usually minutes, beforehand, which can then be used towards making calls. The minutes usually have an expiration date, after which you need to recharge your phone by buying more time with you carrier. Data could also be used instead of minutes.
On the other hand, postpaid is an alternative option where your carrier will bill you after you have made use of your smartphone, usually at the end of the month or some other time period. The exact details will be spelled out in the contract which you need to sign when you become a postpaid subscriber.
What are the pros and cons of postpaid vs prepaid?
Obviously, both options will allow you to make use of your smartphone to call someone, browse the Internet, use popular apps such as Facebook and all the other functionality that a smartphone provides. However, there are a number of benefits and drawbacks to each plan that a smartphone user needs to be aware of.
- Postpaid requires signing a legal contract, which is valid for a fixed amount of time, usually one or two years. Breaking the terms of the contract, such as early termination, incurs penalties that you will be liable for. That is why it is a good idea to read the fine print and know what it is that you are getting yourself into before signing that two year, $50 monthly postpaid plan.
- Prepaid plans come with much less obligations. You can stop making use of your carrier and switch to another one whenever and as often as you wish. There is no contract that you need to sign and can be held liable to. You stay with the carrier for as long as you are contend with their service, whether it is a couple of weeks or a couple of years. It is all up to you.
- With postpaid you know exactly how much money you need to spend on your phone service. Assuming you have an unlimited plan, you can use your phone as often as you wish or use as much data as you like. If it is a limited plan, there are caps in terms of the number of minutes and amount of data you can use per month. Still, as long as you stick with the terms of the contract, you know what you have to pay the phone company each month.
- With prepaid, it is much less clear. Yes, you may know how much a minute or megabyte cost. But depending on how and when you use your phone, your final cost may differ greatly from month to month. You do get charged for what you use. This can sometimes work for you, but it can sometimes also work against you.
- Postpaid plans will often come with a free smartphone included, including some of the most expensive ones such as iPhones. Prepaid plans don't come with this luxury. You have to spent extra to get a phone. In some cases, the carrier will subsidize the phone to make it more affordable with the one condition that the phone can only be used with their service and not with any other carrier.
How to pick between postpaid and prepaid?
In order to make a choice between postpaid and prepaid, you need to have an idea of how you are going to make use of your smartphone. Some of the factors that you need to consider:
- Are you going to make extensive use of your smartphone or are you more a casual user who is only going to need their smartphone once in a while? Generally speaking, postpaid plans are recommended for demanding users, while prepaid plans are the preferred option for less demanding users.
- How big is your budget? If you are short on cash, prepaid is the way to go as postpaid comes with a set of obligations. Postpaid only become cheaper than prepaid if you use it often enough. Otherwise, prepaid is the cheaper option.
- Are you an experienced user, new to smartphones or is the phone carrier new to you? You may want to try out a new carrier with a prepaid plan and then switch to a postpaid plan if you like them as a company.
- Consider which plan offers more value. For instance, if prepaid costs $0.10 a minute, then 500 minutes will cost $50. A $40 postpaid plan could give you twice as many minutes and would in this case offer more value. Take into account if a free phone is included, the value of the free phone and how much it would cost to buy a certain smartphone separately.
Ultimately, the person who knows best is you. Only you know how you are going to use your new smartphone. Therefore, it is you who is in the best position to evaluate which plan is best for you. Take your time to think about all your options and don't be rushed into anything that you are not sure about.
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