Prepaid vs Postpaid

03 September 2020

Most of the time people hear the term "Prepaid" and think of refill cards you buy in the checkout line of any local grocery store. While there are noticeable differences between the two services, each has their own place in today’s market.

Prepaid, is 30 days of service you pay in advance. Before you are ever connected to a cell tower, the phone companies what their money upfront. For cell phone company's there is low risk of the customers not paying on time and letting their account default to collections. That can be great for both you and the phone company. Low risk often comes with lower costs, flexible plans, and never worrying about a credit check or "being qualified" for service. The simplicity of Prepaid is so great and lucrative. The major phone companies allow pop up carriers to rent cell towers and offer you cheap service. Creating their own version of a "no contract" prepaid plan.

But remember, simplicity and low risk does not come without its drawbacks. For starters you get a very watered-down version of the company's customer service department. Try to reach their traditional customer service, and you are immediately redirected to a robotic customer service. And using the robotic service can be an extremely unpleasant experience. If you do not have a simple question, be ready to go in circles with all their different menu options.

When it comes time to upgrade that old phone, you are 100% on your own. You are not liable for your plan, so most companies will not allow you to take part in their trade-in program or installment plan upgrades.
Most importantly, think of Prepaid as great value for one individual. Have a family of 4 or more? And those Prepaid lines can add up quickly.

Postpaid is on the opposite end of the deal. You are still billed 30 days at a time. Except now you can be a few days late and not worry about being disconnected. When you have a large family, 4 or more. The bill is usually much cheaper. You are now able to personalize your plan by adding connected devices such as watches, cars, laptops, tablets, and hotspots. Some carriers offer added features like roadside assistance, insurance, and international calling. The customer service for Postpaid is far superior compared to its Prepaid counterpart. You have a loyalty department, tech support, sales, and even a retention department designed to keep your business if you are wanting to cancel. The Big Three (Verizon/AT&T/T-Mobile) favor these customers because they are their largest revenue stream for the companies. These customers will have the option to trade-in older phones and purchase the newest ones on installments. The best promotions are usually reserved for new Postpaid customers.

So, which is the right plan for you? Each plan will have its pros and cons. Here are just a few questions to ask yourself:

  • Do you have 1 line or several lines?
  • How often do you get new phones? Would trading in every year be something you are interested in?
  • Can you afford that brand-new high-end phone outright or do you need to pay on installments?
  • Do you call or travel out of the country?
  • Are you always on time with paying your phone bill?

We hope that this has helped you have a better understanding of Postpaid and Prepaid. When you understand how cell phone companies work, then you are much happier with your purchases.

- Mobile Advisor

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