Catch Connect's Cheap Yearly Mobile Phone Plans
Contract phone plans were once the ultimate trend in Australia, but recent stats suggest that 32% of Aussies have recently made the switch to a prepaid mobile plan. Could this be indicative of the benefits of prepaid? Are fellow Aussies catching on?
Let’s find out.
To help you choose between a contract or a prepaid mobile plan, read through our breakdown of signing up for a contract plan vs a prepaid plan
The Pros & Cons of Prepaid vs Contract
What is a Prepaid Plan?
A prepaid plan is a phone plan where you pay the telco a monthly usage sum upfront.
In return, you get a set amount of credit for calls, SMS texts, and data.
As soon as you spend the last of these resources, you’ll need an additional payment to keep your phone active. At the end of each month, the plan is reinstated with a brand new monthly credit.
What are the Advantages of a Prepaid Phone Plan?
- It’s Cheaper
If you’re on a tight budget, pick a monthly sum that you believe covers your mobile device spending abilities, without worrying about overstepping the threshold.
With prepaid plans, you have full control over how much money you spend—and you know exactly what you get for a certain price.
- It’s Flexible
One thing that makes prepaid plans stand head and shoulders above contract plans is that you can cancel them as easily as you can buy them.
There’s no contract holding you down, and you’ll have already paid the monthly sum beforehand, so you won’t owe the telco a cent.
- No Shocks at the End of the Month
However much you’re tempted to spend using your monthly credit, once you use it all up, your plan will immediately cease working until it’s topped up
This means, no extra expenses will be secretly piling up behind your back. If you decide to add more credit, you’ll be aware of exactly how much extra money you spend.
What are the Disadvantages of a Prepaid Phone Plan?
- It Can Leave You Stranded
If you are tight on time, are travelling abroad, or have found yourself in a situation where you end up spending all of your credit, you face the risk of being left stranded with no communication, no viable credits, and no way to compensate.
- Fewer Hardware Deals
In general, prepaid plans don’t allow you to get a mobile device as part of your SIM and plan package, which you’ll pay off monthly.
If you need to get a new phone, you’ll need to pay for the entire device at once, which can be quite costly and unfitting for a paycheck-to-paycheck lifestyle.
- Monthly Recharge
Prepaid plans come with the need of having to manually restart your plan at the beginning of every month. While it’s not too difficult a thing to do, the repetitive process can be a tad annoying.
What is a Contract Plan?
With a contract—also referred to as a postpaid—plan, you and the telco sign on a 1 or 2-year long contract, where you pay for your monthly expenses at the end of each month.
Contract plans tend to be more expensive, but they offer you more contract options and greater freedom in return.
What are the Advantages of a Contract Phone Plan?
- Safe and Reliable
Contract plans can get you more included benefits, such as unlimited calls, texts, and data. Moreover, in case of emergencies, even if you do cross the monthly limit, you won’t lose your credit. You’ll be able to call, text, or use data, but your bill will retrospectively reflect this credit usage.
- Hardware Deals
Oftentimes, you can get a new phone as part of your contract plan. Instead of paying for the device upfront, it’ll be divided between your monthly postpaid sum, and you’ll pay it off over time.
- Affordable Family Deals
Getting a contract plan for several family members can be worth the money, as the individual cost will be significantly lower compared to both individual contract plans or prepaid plan options
What are the Disadvantages of a Contract Phone Plan?
- It’s More Expensive
A disadvantage of a contract plan vs prepaid is that contract plans are, on average, more expensive, mainly due to the larger freedom they allow you. Opt for one only if you can afford the expenses.
- “End-of-month” Shock
If you happen to, heavens forbid, leave international roaming on while you’re on holiday, or unintentionally go over your monthly limit, you may get an unpleasant surprise in the form of a hefty phone bill.
- Can’t Quit It
Contract plans usually oblige you to pay them out for one or two years. During that time, you can’t switch to another plan that you may find more suitable. You’ll need to wait for the current plan to expire, or pay expensive penalties to get out of the current contract.
FAQs
Is prepaid phone service better?
Depending on your lifestyle and how much you can afford, prepaid can be a better option for you. If you’re on a budget, it’s probably the best and only option.
What is the difference between prepaid and postpaid?
The main difference between prepaid vs plan is that with prepaid you pay the monthly sum upfront, while with postpaid, you pay it at the end of the month.
Can you turn a contract phone into prepaid one?
Yes, but only if the phone is not limited to a particular carrier. Otherwise, you can easily change the SIM card and use it as a prepaid.
So, is Contract or Prepaid Better?
It all depends on your preferences and allowances. Contract plans offer you more alternatives and can be great for larger families, or people looking to get a free device with their plan
Prepaid plans are great for people on a budget, or those who don’t use their phones as often. This is what we—and millions of other Aussies use!