Which is better value: Postpaid or Prepaid?

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The telcos offer a range of mobile phone plans to suit the needs of different customers, but all these options can lead to confusion. To help make sense of the situation, we’ve broken down two of the biggest buzz words in the mobile phone world – prepaid and postpaid. How do they differ, and where can you find the best value?

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What is a prepaid phone plan?

A prepaid mobile phone plan is one with which you pay the provider a certain amount of money upfront, which is then converted into mobile credit for you to use as you please, on either calls, texts or mobile data, or a combination of them. Some prepaid plans come with a set amount of call time and messages, while others come with pay as you go (PAYG) rates, whereby you are simply charged specific amounts for what you use.

  • Prepaid plans with unlimited talk and text are now very common, leaving data as the main point of difference.
  • Prepaid plans mainly appeal to users who just prefer to pay for their service upfront and not run the risk of incurring any extra charges.

Prepaid phone plans do not come with a new handset, so if you’re keen on the latest smartphone, you will need to buy it outright and then subscribe to your preferred SIM only deal.

Prepaid Mobile Satisfaction Ratings

What is a postpaid plan?

A postpaid mobile phone plan is one with which you pay a fixed amount at the end of each month, in exchange for a set amount of calls, texts and data to use during the billing period. The idea behind retrospective billing is that it allows users to exceed their plan’s limitations, if they need to, and pay for it later.

Postpaid plans are available over three lengths – an auto-renewing month to month basis, 12 months, 24 months or even 36 months. Monthly and 12 month postpaid plans are usually SIM only, with those over 24 months usually including a new handset. When it comes to 12 month postpaid plans, this is where the big guys like Telstra and Optus come out to play with their best value.

Postpaid Mobile Satisfaction Ratings

Prepaid Mobile Plans

If prepaid is your cup of tea, be sure to check out the latest offers from the supermarket telcos. Below is a glimpse into what you can get with some more noteworthy prepaid providers. If you’re willing to spend north of $30, you can get access to well over 10GB data in a lot of cases.

Brand Features Max Data**/billing period Advertised Cost^^/billing period
Kogan Logo

Large

  • Unlimited National Calls & SMS

min. cost $36.90 over 30 day billing period

16GBMax Data**/billing period $36.90Advertised Data^^/billing period More Details
Amaysim Logo

UNLIMITED 15GB Prepaid

  • Unlimited National Calls & SMS

min. cost $40 over 28 day billing period

15GBMax Data**/billing period $40.00Advertised Data^^/billing period More Details
Vodafone Logo

Data Combo $50

  • Unlimited national calls & SMS
  • 23GB bonus data (ends 14 August 2018)

min. cost $50 over 35 days

12GBMax Data**/billing period $50Advertised Data^^/billing period More Details
Ovo Logo

Large

  • Unlimited National Calls & SMS
  • 300 international minutes

min. cost $34.95 over 30 day billing period

15GBMax Data**/billing period $34.95Advertised Data^^/billing period More Details

Postpaid Mobile Offers

If postpaid is your bag, there are several service providers all competing for your custom. As you can see below, there is significant incentive to sign on for 12 months. Doing so could mean you get an extra gigabyte of data or so, or save a few bucks a month. The question is – can you commit to a year?

Brand Features Max Data**/billing period Advertised Cost^^/billing period
Moose Mobile Logo

Moose 25 SIM Only – 12M

  • Unlimited National Calls & SMS

min. cost $300 over 12 month contract

5GBMax Data**/billing period $25.00Advertised Data^^/billing period More Details
Vodafone Logo

$50 Red SIM Only

  • Unlimited National Calls & SMS

min. cost $600.00 over 12 month billing period

30GBMax Data**/billing period $50.00Advertised Data^^/billing period More Details
Amaysim Logo

Value 4G

  • Unlimited National Calls & SMS

min. cost $299.88 over 12 month plan period

10GBMax Data**/billing period $24.99Advertised Data^^/billing period More Details
Dodo Logo

The Lot – 12 Months

  • Unlimited National Calls & SMS
  • Unlimited International SMS & 300 mins to 88 countries

min. cost $478.80 over 12 months

24GBMax Data**/billing period $39.90Advertised Data^^/billing period

What’s good about postpaid plans?

The big selling point of postpaid plans is that they provide the safety net of being able to call, text, or go online whenever you want. You’ll never be stuck by the side of the road because you have no prepaid credit to call a friend for a lift! Postpaid plans also provide the convenience of auto-renewing every time, meaning there is no manual recharging required.

  • Postpaid plans also have a reputation for offering better value than prepaid deals as reward for sticking with your provider every single month and not taking a break.

The benefit of 24 month postpaid plans is that you can bundle a new handset into the deal. If you can’t afford to buy the latest iPhone outright, for example, you can simply pay it off monthly in addition to your plan features. Below you’ll see a range of postpaid plans on a 24 month contract that have an iPhone 8 bundled in.

What’s bad about postpaid plans?

The major downside to postpaid plans is that you run the risk of incurring extra charges for exceeding your plan’s limitations.

  • Excess data charges in particular can be costly, usually about $10 per GB, but this varies between providers.
  • Postpaid plans also require a little more effort to cancel. Unlike prepaid where you can simply not recharge again, postpaid plans need to be cancelled through your provider, otherwise they will keep billing you.

Having a postpaid plan over 12 or 24 months means you lose the flexibility of being able to switch at a moment’s notice when you spot a better deal elsewhere.

Postpaid summary

  • Receive a fixed amount of calls, texts and data for a set price every month
  • Short or long-term contracts available – monthly, 12 and 24 months
  • Convenience of auto-renewing plan features every month
  • Risk of being charged extra if you exceed your plan’s limitations
  • Can include your choice of a large range of phone handsets at an extra cost

Which is better value?

There has traditionally been a perception that postpaid plans offer superior value to their prepaid cousins, but is this really the case?

Not always.

As the tables above may show, it’s pretty neck and neck, at least in the no-contract space. However, it should be noted that 12 month postpaid plans generally offer the most data, in return for your commitment. Now the question becomes: Are you willing to lock-in for a 12 month contract? Of course, you should always pick a plan based on its individual features. You’re sure to find some standout offers in both categories if you look hard enough.

Should I choose prepaid or postpaid?

The mobile service you should choose depends on how you use your phone, or just your personal preference for one type of the other. If you’re a fairly light user who doesn’t require unlimited talk and text, a cheap prepaid plan with a long expiry period could be the way to go. However, there are also some very cheap postpaid plans which can provide the back-up of unlimited calls just in case you ever need them.

Do you want to pay for your phone service upfront and run the risk of having no credit when you run out? Or would you prefer to have an endless supply of calls, messages and data, but run the risk of being charged extra? Maybe your decision will be completely swayed by whichever type of plan offers the biggest bang for your buck.

Whichever way you decide to go, just be sure to compare a wide range of offers to find the best plan for your specific needs and preferences.

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