Prepaid or Postpaid? Which is better?
Most wireless service is sold on month-to-month or one-,
two- or three-year contracts, with a monthly fixed cost that includes
a set amount of local calling. Before signing a contract, you must go
through the carrier's credit check. Every month you get a bill based on
the cellphone plan you choose and any extras you used that month (e.g.
minutes used above your plan, long distance, etc. etc. and so on).
If you decide to cancel service, it will cost you! Most providers have
an early termination penalty. This can range from a flat fee to a charge
per month remaining on your contract. This gives you a limited window
of opportunity to cancel service without any penalty if you find out that
a provider just doesn't meet your needs.
There is an alternative plan that allows you to change the number of
minutes and other provisions: Prepaid
Cell Phone Plan.
If you are buying the phone for emergencies only, then the prepaid cellular
phone may save you more money in the long run. You won't be under contract
and you don't have to pay a monthly package fee for having the service.
You can buy the airtime as you need it (with some exceptions). And you
do not have to pay a deposit for service.
Prepaid is also a way of learning about your usage patterns before committing
to a long-term
monthly billing wireless contract.
Advantages of prepaid cell phones:
- No contract to
sign, no long-term commitment
- No monthly monthly
bill to worry about.
- Better cost control.
You know exactly how much you will spend.
- No hidden fees.
- No credit checks
needed. Perfect for the credit challenged, since monthly billed plans
require credit approval.
- Great if your usage
varies from month to month.
- No security deposits.
Some monthly plans may require a deposit.
- Topping up your
account is easy and you can do it in many ways, at any time, by going
on-line, by phone, bank machine or with a prepaid card.
Disadvantages of prepaid cell phones:
- You pay more per
- If you don't use
the phone for an extended period of time, you lose the money in your
- You can't accept
collect calls or third-party billed calls.
Prepaid cell phones are ideal for:
- people who don't
want to be locked into a year-long contract
- first-time cellular
buyers who don't know how many monthly minutes they should sign up for.
- people who don't
want to go over their budget
- people with damaged
or no credit history
- occasional users
- people who want
to buy their children a phone for emergency use
For Prepaid Plan service providers, go to Prepaid
Cell Phone Plan page.