Prepaid vs postpaid: which plan gives you more for less?

When trying to save money on your phone plan, which option is best for you?

Close up of cross legged woman with iphone and dog

Both prepaid and postpaid phone plans offer certain advantages, but when it comes to cutting back on costs, which one is right for you?

Before a salesperson starts telling you which plan is the best value or comes with the newest phone, think about how often you use your phone and how vital it is to your lifestyle. Here are a few points to get you going.

  • Do you already own a phone, and are you happy with it?
  • How many calls and texts will you make each week? Multiply this by four for a rough idea of how much call and text allowance you will need.
  • How much data will you use in a month? If you’re just going to be checking emails and surfing the web from time to time, you won’t need much. But if you’re planning on watching lots of videos on your phone then you’ll need a lot more data. has a great chart that can help you to determine your data requirements.
  • Will you be travelling overseas soon? And will you be using your phone while overseas?

Pros and cons

With your needs and wants in mind, let’s take a look at the differences between prepaid and postpaid plans.



Up-front costs

Small upfront cost for a prepaid SIM and you must provide your own phone


Early termination fee


Usually yes, however there are postpaid plans available with no lock-in contract

Risk of bill shock



Credit expiration or rollover

Credit expiration varies significantly

Some providers give you as little as four weeks to use your credit, others may give you up to a whole year

Rollover varies greatly with different plans or providers

Different rules may also apply for call, SMS or internet data

Phone included


Lock-in contracts are available with a phone included


Less value for money

More value for money, however required monthly payments can counteract this


Prepaid users run the risk of being unable to make a phone call in an emergency if they are out of credit

Postpaid users must pay a fee every month, even if the phone is not being used

Is it cheaper to buy a phone outright?

One of the big differences between prepaid and postpaid plans is the inclusion of a phone. Having to buy a phone outright can be a huge blow to your budget, but will it cost more in the long run paying for it month by month?

We took a look at the least expensive iPhone 6s Plus 16GB plans offered by the major telcos in Australia to calculate the difference.

Telstra: $97 per month ($55 plan + $42 phone) for 24 months = minimum cost $2328 ($1320 plan + $1008 phone)

Optus: $81 per month ($40 plan + $41 phone) for 24 months = minimum cost $1944 ($960 plan + $984 phone)

Vodafone: $85 per month ($40 plan + $45 phone) for 24 months = minimum cost $2040 ($960 plan + $1080 phone)

Virgin: $67 per month ($30 plan + $37 phone) for 24 months = minimum cost $1608 ($720 plan + $888 phone)

Cost of phone outright from Apple Store: $1079

As you can see above, the plans generally came out on top, but not necessarily by a large margin. It’s also worth noting that more competitive prices can be found from online locations, such as eBay.

All prices correct as of 12 July 2016.

Author’s note

In my opinion, the best option for cutting back on costs is to find a SIM only/BYO phone plan that works for you. These plans are a hybrid of prepaid and postpaid plans. You receive the savings of a postpaid plan, as well as some of the flexibility of a prepaid plan.

Whistle Out allows you to search plans from over 30 different providers in Australia, so if you’re thinking about changing plans it’s worth a visit.

Do you prefer prepaid or postpaid? Let us know in the comments below.



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    13th Jul 2016
    The plans get you with more expensive phone charges and they provide you with phones with small GB, eg 8GB, 16GB. I purchased my 164GB phone outright and save on prepaid, 7GB internet with unlimited phone usage and no contracts. It is worth buying outright.

    13th Jul 2016
    I have a mobile phone for emergency use when traveling in the car. It cost me all of $20 outright and buy a twelve month plan for $30. Best deal around.
    19th Apr 2017
    Agree fully
    13th Jul 2016
    I prefer Pre-Paid for control but it still pisses me off that the unused credit I purchase does not roll over. It's like stealing.
    Polly Esther
    13th Jul 2016
    Yes it has happened to me a couple of times and I get as wild as a meat axe over it. I have to remember though it is my fault and if I remember to top up before the due time the remaining amount does roll over. I think most pre- paids do roll over if topped up early. Mine certainly does.

    13th Jul 2016
    Use ALDI Mobile - they use Telstra's 4G network - and YES - it is the same network not a second-hand version of it.

    $25 per month for unlimited calls and SMS within Australia including 2Gb of data.

    Plan prices go up and down from that depending on your usage requirements - and you can change plans yourself online whenever you want - you have simple and total control.

    If you ever need to ring them they have an OS call centre of course - BUT - they answer your call really quickly. Try to get that service with Telstra!

    Bloody brilliant!
    13th Jul 2016
    ALDi have PAYG -the following is straight off their site...

    Pay As You Go $15
    For casual call and SMS rates our Pay As You Go (PAYG) credit provides flexibility and great value.

    Calls 12c per min
    SMS 12c each
    MMS 35c each
    Data 5c per MB

    Long lasting credit...
    Our Pay As You Go plans give you 365 day credit expiry.

    And for $5 you can park your mobile number and not use it for 365 days if you want to go OS for example.
    Old Geezer
    13th Jul 2016
    We have a phone here that is used for emergencies and I put a $5 Aldi card into it last September and it still has $4 of credit on it.
    13th Jul 2016
    Vodafone currently have a 365 day pre paid option. However, from 1 August this will no longer be available for new customers. Yes the per call min charge is higher but your credit doesn't expire every month/4 weeks, so you can top up when you want/need not when they want the money. You then add on a data amount which starts from about $5 - this does only last a month though.

    What I don't like is the extra charges for 13 and 1300 numbers. Why are these higher from mobiles and why are they not included in landline plans. They are a convenience for the business so why is the charge levied on the customer who has no alternative these days but to use them?
    13th Jul 2016
    What about the 1900 numbers do you get those and for how much extra to add on ?. I don't mean the call charge of 0.50c or whatever. I mean the cost for the privilege of being able to use the 1900 numbers?
    13th Jul 2016
    I don't ever call 1900 numbers so I don't know but I would expect them to be even more expensive than from a landline.

    The point about the 13 and 1300 numbers are they are used by businesses so that they only have a single number to advertise. It is almost impossible today to avoid using these numbers. 1900 numbers can easily be avoided!
    Old Geezer
    13th Jul 2016
    I have 2 smart phones. One I use an ALDI pay as you go SIM card so that I keep same number for others benefit. $15 lasts me 12 months. I turn off the data on my smart phone and it uses WIFI when it is available.

    If I go away from home I activate a Telstra prepaid SIM starter kit as it works on NextG which Aldi does not. This last me a month with lots of data and calls. I can also activate them data only. Thought out the year you can buy $30 starter kits for $10 or $15 so I buy a couple in advance and activate when required. Note my number changes every time I activate a new SIM card but it doesn't matter as I keep the other SIM number as well.

    When I go overseas I take the second phone and get a local SIM card.

    13th Jul 2016
    I use Aldi $15 prepaid for 365 days which lasts me that time.
    Now I have to buy a new phone because the 2G network is closing in December.
    Not too many basic phones around at a reasonable price.
    Old Geezer
    13th Jul 2016
    Hardly Normal had Samsung Galaxy Ace3 for about $80 recently. I've got one of these unlocked for over 3 years now and it's still working well. I haven't had any trouble getting Telstra locked phones to work on Aldi other than having to change a few settings. Aldi website tells you how to do it.
    13th Jul 2016
    Thanks Old Geezer, I appreciate the info. will check out Aldi website.
    Old Geezer
    13th Jul 2016
    If a phone locked to Telstra doesn't work with Aldi SIM check out

    Configurations and service setup
    The pom
    13th Jul 2016
    I bought an old model Nokia Smart phone, new, for about $70 and using it with Amaysim and it gives me great service. It links to my landline Optus Broadband package and find it very low cost indeed.
    19th Apr 2017
    If you have the internet and landline at home there is no need for a phone with all the trimmings. I have bought a cheap phone in the past for emergencies and have paid 20 dollars credit. It is a rip off when you have credit left over. Time telcos looked at that.

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