Prepaid Phone Plans vs. Postpaid Phone Plans: What’s the Difference?

two women looking at phones

So, you’ve decided to get a new phone or add service with a phone you already have. Congratulations! As you’ve been considering a variety of phone plan options, you may have heard the terms prepaid phone plan and postpaid phone plan… but do you know what those terms mean? I’ve broken them down for you below to help you choose the right plan for you.

What is a prepaid phone plan?

Getting prepaid wireless service or a prepaid phone plan means that you’re paying up front for your service charges every month or every few months. When you opt for prepaid service, you’re only committed to it for the amount of service you purchase ahead of time.

You pay as you go, and if you miss a payment, your phone service is made unavailable. Your account may remain for some time, however, so you can return to the service when your funds allow. In the event that you don’t need your phone for an extended length of time, you’re not stuck paying a monthly bill when you’re not using it. And, if you choose a data plan that isn’t unlimited and run out of service, you have the option to add more.

So, if this kind of flexibility is important to you, prepaid phone service may be the way to go.

What is a prepaid phone?

In terms of the devices themselves, there isn’t really such a thing as “prepaid phones” or “postpaid phones.” You can use any phone that is compatible with your wireless carrier’s network for either type of service. That said, some prepaid providers tend to include lower priced phones in their line-up that you can pay for up front without taking on a big expense or using financing. And, some postpaid providers will offer special deals and financing that might help you pay for your phone over time.

a woman looking at her phone

What does postpaid mean?

Postpaid wireless service means you’re paying a monthly plan charge for service that typically includes some combination of calls, texts, and data usage. If your wireless plan is capped at a specific amount of data usage, you will either see overage charges on your bill for additional data to be added to your account if you go over your allotment for the month, or your ability to use data will be limited for the rest of that bill cycle. But if you have a wireless plan with unlimited talk, text and data usage, you will pay the same rate plan charge every month regardless of your usage amount. You will only pay additional charges for features not included in your postpaid rate plan, such as insurance for your phone or an international package that you add for calls, text and data usage while on a trip abroad.

Is prepaid better, or is postpaid better?

Neither option is better or worse. They are different. The biggest difference between a prepaid phone plan and postpaid phone plan is how you pay for your service. In one case, you pay as you go, before you use your phone for the month or series of months; in the other, you pay a recurring monthly bill for each service period.

Before you make your decision on which kind of service you want, make sure you check out both prepaid phone plans and postpaid phone plans to find the plan that works best for you.

This article is AT&T sponsored content written by Carly Milne and revised by Matthew Johnsen, both TechBuzz contributors. The statements in this article are their own and don’t necessarily represent the positions, strategies, or opinions of AT&T.

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