Can I save money with a prepaid phone plan?

Counting out your minutes so you don’t run out, deciding whether it was worth using your very limited internet to look up the name of that actor whose name no one can remember…do you ever find yourself nostalgic for the days of the prepaid mobile phone plan? 

It turns out that prepaid plans never actually went away! They just look a little bit different today than the prepaid phone plans of the early 2000s. If your postpaid phone plan is burning a hole in your pocket each month, you might just want to look to the prepaid glow-up for a money-saving shortcut.

How can a prepaid phone plan save me money?

The most important thing to be aware of are the differences between a prepaid and postpaid plan. 

A postpaid mobile phone plan (whether sim-only or handset-inclusive) will charge you at the end of a billing period for the calls, texts, and data that you used. 

When you opt for a prepaid mobile phone plan, you’re paying up-front for a set amount of data, calls, and texts. When you run out, you can opt to recharge, or switch to another plan that suits you (see individual plans for more information). 

If these seem fairly similar to you, you might be wondering where the potential for savings comes in. 

Here’s where prepaid plans offer opportunities to save money:

• Longer plan options - While most postpaid phone plans are billed monthly, a prepaid plan is charged as a lump sum upfront. This can be for a short period of time if needed, but these can also extend up to a year. If you can make your credits last the full year, then a one off payment can be a much more manageable expense than 12 monthly payments of varying amounts.

• Paying for what you use - A postpaid plan might come with a bunch of bells and whistles that aren’t applicable to you (a former telco insisted on providing me with free sports streaming). With a prepaid plan, you simply use up what you have, and then you pay for more.

• No nasty surprises at billing - We’ve all received that one extremely high phone bill. Be it texting in votes for the Eurovision song contest (worth it), racking up minutes on an international number, or going over the data threshold a few too many times. A prepaid plan avoids that, because once you’ve used up your credits, you’ll need to recharge before you can use more.

What are some common misconceptions about prepaid phone plans?

Since prepaid plans have been around since we all wanted flip phones (no, not the cool flip phones), there are a few misconceptions floating around that need debunking.

“Prepaid options are limited” - Maybe this was true back in 2004, but nowadays it’s anything but. The introduction of e-sims has actually made the options of prepaid plans wider and more personalised than ever before, with data options ranging from 10GB to 80GB a month or as much as 500GB a year.

“There aren’t any perks with prepaid phone plans” - If you’re sticking to postpaid because you want those included calls and texts, rest assured that many prepaid plans offer the same benefits. Kogan, for example, allows unlimited domestic calls and texts for 365 days. Like many other major providers, they also have packages allowing you to add data for international roaming.

“I’ll have to recharge all the time” - Like anything, this comes down to the prepaid plan you choose and how you use your phone. Choosing a plan with enough data for your needs is key, because otherwise you might find yourself needing to recharge more often than you would on a monthly postpaid plan. 

“It’s hard to go back to a postpaid plan” - The beauty of a prepaid plan is the ease of switching things up. You aren’t tied to a provider for any longer than the length of your plan and the duration of your credits. Didn’t think you had enough data? Switch things up! Want to upgrade your phone and pay off your handset on a postpaid plan? You’re not locked in.

Prepaid phone plans aren’t the right option for everyone, especially for those who might forget to recharge. 

That said, if a prepaid plan suits your needs? Your wallet might thank you.

If you’re in the market for a new plan, find Mozo’s picks for the best mobile phone plans. Meanwhile, start comparing prepaid phone plans below.