Prepaid vs Postpaid Mobile Plans

Learn the difference between prepaid and postpaid mobile plans and which type may be best for your needs with Savvy.

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on October 23rd, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Prepaid vs postpaid plans

When choosing a mobile plan, an important consideration is what type of plan to get. The majority or phone plans are prepaid or postpaid – but what does this mean and which should you choose?

In this useful guide, we compare the two types of plans to help you understand the key differences so you can choose the best plan for your needs. Let’s dive in!

What is the difference between prepaid and postpaid mobile plans?

There are two main types of mobile plan in Australia: prepaid and postpaid.

Prepaid mobile plans require you to pay for your mobile service upfront, before you use it. You can purchase prepaid plans in a variety of denominations, and your service will be suspended once you run out of credit.

Prepaid plans are a good option for people who want to control their spending or who don’t have a good credit history, as they do not usually require credit checks. They are also a good option for people who travel frequently, as you can avoid unexpected roaming charges by using a prepaid plan.

Postpaid mobile plans allow you to use your mobile service and pay for it at the end of the month. You will receive a bill from your mobile carrier at the end of each month, which will detail your usage and charges.

Postpaid plans are a good option for people who want the convenience of not having to worry about running out of credit and who want access to the latest features and services. Postpaid plans typically offer more features and benefits than prepaid plans, such as unlimited talk and text, data rollover and discounts on devices.

Which type of mobile plan is best for me?

Whether a prepaid or postpaid phone plan is better for you depends on your individual needs and preferences. Here is a comparison of the two types of plans to help you decide:

Prepaid phone plans

Pros:

  • No contract required
  • More control over spending
  • Good option for people with bad credit

Postpaid phone plans

Pros:

  • Typically more features and benefits, such as unlimited talk and text and discounts on devices
  • No need to worry about running out of credit
  • Convenient to pay for service at the end of the month

Cons:

  • You have to pay for service upfront
  • Service may be suspended if you run out of credit
  • May have more limited features and benefits compared to postpaid plans

Cons:

  • May require a contract
  • Can be more expensive than prepaid plans, especially if you use a lot of data
  • Early termination fees may apply if you cancel your contract early

If you are looking for a flexible and affordable phone plan, a prepaid plan may be a good option for you. If you want access to the latest features and services and don't mind paying a bit more, a postpaid plan may be a better choice.

Here are some additional things to consider when choosing between a prepaid and postpaid phone plan:

  • How much data do you use? If you use a lot of data, a postpaid plan may be a better option for you, as postpaid plans typically offer more data than prepaid plans.
  • Do you need unlimited talk and text? If you make and receive a lot of calls and texts, a postpaid plan with unlimited talk and text may be a good option for you.
  • Do you travel frequently? If you travel frequently, a prepaid plan may be a better option for you, as prepaid plans can help you avoid unexpected roaming charges.
  • What is your budget? Prepaid plans are typically more affordable than postpaid plans, but they may not offer as many features and benefits. Postpaid plans are typically more expensive than prepaid plans, but they offer more features and benefits.

Ultimately, the best way to decide which type of phone plan is right for you is to consider your individual needs and budget. Compare different plans from different providers to find the best plan for you.

What other mobile plans are available in Australia?

In addition to prepaid and postpaid mobile plans, there are a number of other mobile plan options available in Australia. Here’s a brief overview of some of the other mobile plan options available in Australia:

  • Pay as you go plans: PAYG plans are an alternative type of mobile plan that allow you to pay for your mobile service as you use it. This can be a good option if you want to control your spending or don’t use your mobile phone very often. PAYG plans typically offer more flexibility than prepaid or postpaid plans, as you can top up your account with as much or as little credit as you need.
  • SIM-only plans: SIM-only plans allow you to use your own mobile phone with a mobile carrier, which can be a good option if you already have a mobile phone and don’t need a new one. Available on both prepaid and postpaid plans, SIM-only plans typically offer more flexibility than plans that include a phone.
  • Family plans: family plans allow you to share a mobile plan with your family members, which can be a great way to save money if you have multiple mobile phone users in your household. Family plans can offer a variety of features and benefits, such as unlimited talk and text, pooled and discounts on devices.
  • Business plans: business plans are designed to meet the specific needs of businesses of all sizes. They typically offer features and benefits such as discounted rates for multiple lines, access to business support and priority customer service.

Frequently asked questions about prepaid and postpaid mobile plans

Which type of mobile plan is better for travelling?

Prepaid mobile plans may be a better option for travelling because they allow you to avoid unexpected roaming charges. With a prepaid plan, you can top up your account with a certain amount of credit before you leave, and then use that credit to pay for your mobile phone service while you’re travelling. This way, you know exactly how much you’re spending, and you won’t have to worry about getting a huge bill when you get home.

How do I switch from a prepaid plan to a postpaid plan?

If you are staying with your current provider, it should be relatively easy to change to a postpaid plan. Your provider can help you choose a postpaid plan that meets your needs and budget and you can typically switch from a prepaid plan to a postpaid plan online, by phone or in person. You may need to provide your personal information and credit history.

If you are switching to a new provider, you will need to contact them and let them know that you would like to switch. You may also need to provide them with your personal information and credit history. Once your new service is activated, your old plan will be cancelled.

Can I get a mobile phone plan without a credit check?

Yes – you can get a mobile phone plan without a credit check in Australia. Prepaid plans do not generally require a credit check, as you pay for your service upfront. Some postpaid providers may also offer plans with no credit check.

Do prepaid and postpaid plans offer the same network coverage?

Yes – prepaid and postpaid plans typically offer the same network coverage. This is because both types of plans use the same network infrastructure provided by the carrier. However, there may be some exceptions, so it's always best to check with your carrier to be sure.

Additionally, prepaid plans may have lower data speeds than postpaid plans, especially in congested areas.

Helpful guides on mobile plans

Switch mobile plans

How to Switch Mobile Plans

Find out the steps you need to take to change mobile provider with Savvy’s useful guide. Switching mobile providers can be a...

What is iMessage

What Is iMessage?

Find out what iMessage is and how it works with Savvy’s useful guide. Messaging has become an essential part of our lives....

Using mobile phone overseas

How to Use a Mobile Phone Overseas

Find out how to use your mobile phone abroad without breaking the bank in Savvy’s helpful guide. Travelling abroad is an exciting...

How Much Mobile Data Do I Need?

How Much Mobile Data Do I Need?

Learn how much data you should look for in your mobile plan with Savvy’s handy guide. In today's digital world, mobile data...

Compare mobile plans with Savvy

Whether you're looking for basic prepaid mobile plan or a postpaid contract with a choice of extra features, you can compare a range of offers from leading Australian providers side by side with Savvy. Get started with a free, no-obligation quote today!
Compare mobile plans

Disclaimer:

Savvy is partnered with Econnex Comparison (CIMET Sales Pty Ltd, ABN 72 620 395 726) to provide readers with a variety of mobile phone plans to compare. We do not compare all retailers in the market, or all plans offered by all retailers. Savvy earns a commission from Econnex each time a customer buys a mobile phone plan via our website. We don’t arrange for products to be purchased directly, as all purchases are conducted via Econnex.

Any advice presented above is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing a mobile phone plan. For further information on the variety of mobile phone plans compared by Econnex, or how their business works, you can visit their website.