Welcome, visitor! [ Register | Login||

SEARCH

Prepaid phone service vs. postpaid – Pros & Cons

ByinTips & Guides | April 19, 2015

Prepaid phones vs. postpaid

For many people the most important decision when it comes to mobile communication is choosing the right phone. Obviously, even the best phone is useless without a solid network to provide services like calling, texting and data. Choosing a carrier is not the end, though. You still have to decide whether you want to go prepaid or postpaid. Generally speaking, the difference between these two options boils down to how you pay for your service – in advance (prepaid) or after the billing cycle ends (postpaid). Like everything, however, each option has its pros and cons.

Month to month costs

Cell Phone UserThe biggest advantage of prepaid service is that it brings significant savings. Currently, some of the cheapest prepaid plans start at as little as $40 per month, in which case you get unlimited talk, text and a decent amount of data. Moreover, prepaid plans help you keep your expenses in check because you pay for the service in advance.

Postpaid option is generally more expensive not only because of how much you actually pay for the service, but also due to many fees customers are required to pay, for instance activation fees, monthly access fees, monthly rate fees, etc. In contrast, some prepaid plans come with no fees whatsoever. If you have big family and need a multi-line account, you may want to consider postpaid service as some carriers offer pretty competitive plans that can be cheaper than prepaid.

Price of the phone

How much you pay for using the service is one thing, but you can’t ignore the fact that phones cost too. When you decide to sign a contract, you can purchase a new phone at a subsidized price, which in the case of a recently released device is usually between one third and half of its full retail price. Older devices can even be had for free on contract.

Prepaid plans don’t allow subsidized purchase which means that you always pay full retail price. If you are happy with an entry-level device, you probably won’t feel the difference. However, if you want to buy a more premium handset, it can hit your wallet hard. Some networks allow to pay off the phone in monthly installments, which, although certainly easier on your budget, still is a lot of money. On the other hand, prepaid service lets you bring your own device, so you are not required to buy a new phone at all if you already have one and its compatible with the network.

Choice of phones

PhonesThe vast majority of phones released today are usually offered directly by all carriers, so availability is becoming less and less of an issue today. However, even when it comes to the biggest carriers, the choice of on-contract models is always limited and there is nothing you can do about it. It’s not a problem for prepaid GSM carriers, since in most cases you can bring your own device to the program, even imported one, as long as it’s a GSM model.

Freedom

This is another huge difference between prepaid and postpaid service. Postpaid service requires you to sign a contract with a carrier which ties you to that carrier for two years (sometimes it’s possible to sign one-year contract, though). During this time you can’t go to another carrier because you like its offer more unless you pay early termination fee which in most cases is high enough to give you a big headache. It’s not an issue for prepaid customers. Don’t like your current plan? You can switch to another one without any fuss. Prepaid is also a good option for those who travel often. Since you don’t have to sign any contracts, you are free to buy a SIM card from another network anytime you need, if your old one doesn’t offer coverage in the area you are traveling to.

Coverage and network priority

In big cities there is generally no problem with coverage regardless of which carrier or plan you choose. However, there are still many areas where you may experience serious issues if you are on prepaid, which means roaming and additional costs. Postpaid service does much better here.

Here’s another point for postpaid service. When the data network is highly congested it’s the on-contract customers who have priority. It may not be a very common problem, but some prepaid customers complain about slower data compared to on-contract service.

Customer service

Obviously, every network does its best, at least in theory, to take care of its customers, but somehow customer service for on-contract plans seems to be better. If you commit two years of your life to one company, that company will probably try pretty hard to get you to stick for another two years. Prepaid networks, especially MVNOs, tend to be more carefree when it comes to dealing with their customers. Of course, it’s not a universal rule and it depends on the carrier you choose.

Device insurance and credit check

When you buy the cheapest phone you can find, insurance probably won’t even cross your mind. However, it could be a good idea if you buy a premium device. Insurance obviously will add to the costs, but if you are on postpaid, the whole process will be quick and easy. With few exceptions, insurance is not included in prepaid plans – you will have to look for third-party insurance options.

Credit check is obligatory for on-contract customers but is not required if you go prepaid. It’s a huge plus for those who either have no credit, poor credit or simply don’t want to involve their credit score just to get a phone.

Prepaid phone service vs. postpaid

Although at first glance it looks like an easy choice, in reality there is much more to choosing the type of service than just deciding how you want to pay for it. It’s a decision many customers take too lightly and in many cases they end up disappointed, discouraged, and complaining about their carrier, all of which could be avoided if they took time to carefully consider pros and cons that come with each option. Only when you fully understand what prepaid and postpaid service can offer you, you will be able to make the right decision.

Find out more:

  

Latest News

Leave a Question, Comment or Review