Prepaid vs. Postpaid: Which Mobile Plan Is Right for You?

Whether to get a prepaid vs postpaid plan for their device is a question millions of Aussies have weighed up ever since mobile phones were launched Down Under in 1987.

While there used to be a notable difference in value between the two, the gap has now closed to the point that their charges and inclusions tend to be similar.

In fact, what sets them apart is the way they bill you, and this is now a major factor for many when deciding which way to go.

Today, Aussie telcos offer a huge selection of call and connectivity options to meet the needs of different customer bases. You just have to look at the range of Vodafone mobile plans available as evidence of this.

But too much choice can often lead to confusion. So, to help you better understand your options, we thought we’d breakdown how prepaid and postpaid plans compare right now.

Hopefully this will help you make your mind up on which plan is right for you.

What is the difference between prepaid vs postpaid plans

Essentially, the biggest difference between the two plans boils down to how you pay for them.

With a prepaid mobile phone plan, you actually pay the network provider a specific amount of money upfront, which they then convert into credit for mobile data, text or calls.

Some of these plans come with a limit on the number of messages and call time available to you. However, others most offer no such limitations or only charge you for the amount of megabytes, messages or minutes you use on a pay-as-you-go rate. Overall, the main point of difference between them is their cost and data inclusions.

By contrast, a postpaid phone plan is one that charges you a fixed amount at the end of your usage period, during which time you can use a set amount of data, text and calls.

The main purpose of this type of retrospective payment plan is that it gives customers the freedom to use more than their plan’s limitations without interruption to their service and paying for it later.

Ultimately, this gives them the freedom to always have connectivity, even if they exceed its monthly inclusions. However, it does come with risks because if you don’t keep track of your usage, you could receive a higher bill than anticipated.

What are the Pros and Cons of a Prepaid Plan?

The great thing about a prepaid plan is that you get what you pay for. This means that once you have used all your data or text/call credits, you won’t be hit with any surprise charges.

Prepaid plans are easy to get as SIM card packs and top-ups are sold in most supermarkets and many retail stores. They are also quick to set up and (re-)activate and come with various expiration dates, ranging from seven days and 28 days to six months or a whole year.

Overall, they are a good option for those who want to stick rigidly to a budget or who don’t use their devices too much.

That said, if you run through your data or call limits prior to the expiration date reset, you risk not having connectivity should you need to use it. You can, of course, always recharge or top up your call or data pack.

But if you do this on a regular basis, you could end up spending more money than you otherwise would if you had another plan.

What are the Pros and Cons of a Postpaid Plan?

With postpaid plans you will never run out of data because you can use as many call minutes, text or data as you want and pay for it later.

Moreover, as they are billed on a monthly basis, you will only pay 12 times per year (as opposed to 13+ if you regularly need to recharge a prepaid plan), and if you choose auto-renewing, you will not have the hassle of manually recharging.

Additionally, if you decide to purchase a new phone and bundle it with this type of plan, you will be able to split the cost of it over a 12-, 24- or 36-month period, which might be a more affordable way of procuring the model you want outright.

However, if you exceed the inclusions on your plan, particularly data, you may end up being hit with a bigger bill than you were expecting. Often, plans that come with excess data charges can end up being very expensive as you can be charged as much as $10 per extra 1GB of data you use.

Other negatives associated with postpaid plans are that they can be a bit of a hassle to cancel and might result in you having to pay an exit fee. In order to sign up for one, the network provider might also run a credit check on you, which might affect your chances of being approved for one, depending on what your credit score is.

Should I choose prepaid or postpaid?

Ultimately, whether you decide upon a prepaid or postpaid plan is largely influenced by how you use your phone.

Those who don’t use their phones that often and only need a few GB of data a month might be better off with a cheap prepaid plan that has a long expiry period and small data inclusions.

However, if you want the guarantee of always having access throughout the month and the ability to use as much data as you want, then a postpaid plan might be more suitable for you.

Whichever way you decide to go, make sure you shop around for the best deal.