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Should I go on a prepaid or post-paid plan?

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Here are the pros and cons of a prepaid plan versus a post-paid plan to help you decide.




  •  No compulsory monthly payments
  • Less risk of overspending
  • You pay for your mobile phone service before you use it by buying credit. When your credit runs out, you won't be able to use your phone until you top-up again. This means you will never pay more than the credit you put onto your account or pay any extra fees or charges on top.
  • You can't over-spend unless you top-up too often 
  • You can control your spending each month by choosing how much you would like to spend
  • You are NOT locked into a contract
  • You can leave whenever you want by not recharging your phone
  • Options can be set up where money is automatically taken from you credit card or bank account at a set time (e.g. every 30 days or when a certain credit balance has been reached (e.g. $4)


  • No upfront costs
    • You won't have to pay for your plan until your first month is over
    • You don't need to buy a phone outright, but if you choose a mobile phone plan that includes a mobile, you will need to pay for the phone and your plan starting from your first monthly payment and every month after until your contract ends
  • You can always contact someone
  • No need to top-up your credit each month









  • You need to have a phone already or pay for a phone upfront. Paying for a mobile, a SIM Card and your first recharge could add up to be a big upfront cost.
  • If you have selected an automatic debit option then you could accidentally end up paying for credit when you didn’t want to and credit can’t be ‘refunded’
  • You could run out of credit if you forget to recharge on time, which means you won’t be able to make calls or send texts
  • Unused or bonus credit will usually expire if you don’t recharge (this happens on post-paid too: each month, any unused credit will usually expire and cannot be used again in the next month)



  • You always need to pay compulsory monthly payments (called your minimum monthly spend)
  • Greater risk of overspending
    • There is no limit to the charges you could rack up if you don't monitor your usage
  • After you have used up all of your monthly allowance, you will be charged for all extra calls/text/data you use
  • Calling, SMS and data rates are not necessarily cheaper through a post-paid plan compared to a prepaid plan
  • You are locked into a contract for a specific amount of time (e.g. 1 or 2 years)
    • If you want to leave your contract you will usually have to pay an extra cost (called a cancellation fee) – the cost will depend on your plan and the number of months remaining on your contract. You will probably have to pay out the rest of your contract
    • Phone contracts can be hard to understand but it’s important that you know what you’re signing up to
  • The minimum amount must be paid each month, otherwise you will be charged late fees or have your service disconnected


Last reviewed June 2013