Advantages and Disadvantages of Paying as you go

Cellular phones are literally everywhere these days. There is a plan for everyone, even plans that are not plans. As with anything else, there are advantages and disadvantages to prepay plans.


*No credit check. Regular cellular plans require a credit check to see if you will have to pay a deposit, and if so, how much of one. Some cellular service providers will deny you an account if your credit is below their acceptable standard. This is most likely because if your credit happens to be bad enough, they may view you as a high risk; in other words, they may feel that you will not pay your bill. With pay as you go, you do not have to worry about good or bad credit or paying a deposit.

*No long term contract. After you are approved for an account with a regular plan, you then are required to sign a contract. These contracts are generally for a term of two years. If you break your contract for any reason, you are then penalized with an early termination fee as well as having to pay the balance of your bill. Pay as you go, or prepay, does not require you to sign any contracts.

*No danger of overages. A major problem with regular cellular plans is that customers go over their allotted minutes in one month. This is especially troublesome for people on family plans. When they use more than their allotted minutes, they have to pay more for those extra minutes they used. With prepay plans, it is almost like using a debit card, once the money you put in the debit account is gone, your card cannot be used again until you put more money into the account. Prepay plans work this way, you put a certain dollar amount in your cellular account and once that is gone, you cannot use the phone again until you put more money in the account.

*No bill. On a regular cellular plan, you receive a monthly bill. Prepay service providers do not send out bills because there is no reason for a bill. This is really nice because you do not have to cringe at opening a bill that is much bigger than you expected.

*911. Even if you do not have any money/minutes in your prepaid account, you are still able to dial 911 for emergencies. This is a big plus if you are in an accident, or see an accident while traveling, but do not have minutes on your prepaid phone.

*No activation/disconnection fees. Regular plans generally require a fee just to activate your new service. This is on top of the deposit and purchase price of your new phone. Prepaid service does not charge an activation fee. You buy your phone, buy the amount of minutes you want, call or go online to activate your new phone and voila!

*Use it when you need it. This advantage is really handy for people that do not use a cellular phone on a regular basis. Your prepaid phone can sit in a drawer with no minutes on it for months, and you do not have to pay a penny until you need/want to use it. This is nice for people who do not travel very often, but can have an emergency phone for whenever they do travel.


*Run out of minutes too fast. Prepaid minutes can run out very quickly, depending on who the service provider is and what type of plans they offer. With some prepay plans, twenty dollars worth of phone calls can add up to five days worth of phone use.

*Bad reception in some areas. Prepay service is not quite as dependable as regular cellular service. With prepay service, you may have more areas of “spotty”(bad reception) or dead spots, where there is no service. It is best to check the coverage area for your prepay service before traveling outside of your home area.

*Older equipment. Many prepay service providers can offer cellular phones, hands free devices and other accessories at cheap prices because the equipment is slightly outdated. If you want the latest and greatest available, prepay may not be for you.

*Features cost more. Things like internet access, media downloads and picture messaging can cost more with some pay as you go providers. They may charge per day for the feature, or even per usage time. These are things you need to check on before you use any of the special features.

*Some prepay plans do not allow rollover. Some prepay providers will not add unused minutes to a replenishment card. In other words, if you have two hours of usage left and you add more money to your account, you will lose the two hours and only be left with the new amount you added to your account.

Pay as you go service is offered by a wide variety of mobile service providers. Some people opt for prepay plans due to ease of use and no long term contracts. There are bad points to prepay service like bad reception areas and higher cost of special features like internet and picture messaging.