Learn about the differences between pre-paid, post-paid and month-by-month plans.
Don’t get locked in to the wrong plan. Learn about the differences between pre-paid, post-paid and month-by-month plans to understand which option is the best for you.
A pre-paid plan means that you will pay a small fee to purchase a sim card, after which credit will be subtracted from your sim card account each time you make a phone call or send an SMS. You can purchase more credit from most supermarkets and newsagencies.
Pros: Prepaid credit can be purchased when needed, and you won’t find yourself overlooking a bank statement to discover that you’ve been overcharged.
Cons: Pre-paid is usually the most expensive option per call/SMS, so heavy phone users may want to consider alternatives. Credit expires, so make sure you know how long yours will last before you go pre-paid. You must also provide your own phone, so remember to check whether it is compatible with the provider you choose.
Also commonly referred to as ‘cap plans’ or ‘contracts’, post-paid plans allow you to use your phone as much as you want for a monthly fee. However, if you exceed a certain amount of use, you will be charged extra at an inflated price. Post-paid plans require you to pay at the end of the month and often include a phone in the plan.
Pros: It’s convenient, as you can have a phone included in the plan, which is usually good value for money.
Cons: Bill shock can devastate post-paid phone plan users, but recent changes to laws have made it harder for the big three telcos (Tesltra, Optus and Vodafone) to get away with this. Customers of these companies will be updated by SMS if they are approaching their usage limit. Most contracts require a 24-month lock-in period. So if you want to end the plan early, you will have to pay a substantial fee.
These plans function in the same way as post-paid plans, except they do not require a lock-in contract or, if so, a very short one. Some may also require more than one month’s notice if you are cancelling your plan.
Pros: Allows you to enjoy the pre-paid feeling of freedom with no lock-in contract, meaning you can change plans whenever, whilst also enjoying the post-paid cost efficiency, but you will need to have your own phone.
Cons: Month-by-month users are still as susceptible to bill shock as post-paid users.
On which type of phone plan are you on? Do you have any advice for your fellow members?
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