Articles, Blog

Prepaid vs Contract mobile plans

November 30, 2019


Hi there, Alex Kidman from Finder.com.au talking to you today about the difference
between a prepaid and a contract mobile phone plan. Now in both cases, you’re actually going to
be signing up for a mobile phone contract. There’s still a certain amount of paperwork
to do, you’ve got to identify yourself, and you are committing to a certain quantity
of spend. The key difference between these two types
of contract however, is in the way that you pay. Typically, these days you’ll get unlimited
calls and texts, but you’ll also get a data quota. Once you’ve used that data quota up on a prepaid
plan, that’s it, no more data, unless you buy some more. On a contract plan, however, you can go into
excess usage. And this will typically attract a price of
$10 per gigabyte or part thereof you use, over whatever the quota on your plan is. Now, there are benefits to both arrangement. Obviously prepaid allows you to control your
mobile spend more discretely, because you can never spend over what you’re
already given your telco. Whereas on a contract plan, you can use more
data if you need to, without having to particularly worry about
whether or not you are going to run over quota, or whether or not something you’re doing is
suddenly going to stop because you’ve run out of quota. Typically speaking as well, contract plans
are the ones where you can get, but you don’t have to, a supplied handset
with your plan. Whereas prepaid plans exclusively assume that
you already have a mobile phone handset that you’re going to use with it. Prepaid plans are great if you’re on a tight
budget, and of course to control the network that
you’re on, because prepaid plans only commit you for whatever
period that you pay your telco for. So if after your 28 days or 30 days, you think “No I’m not happy with this provider”, or
you just see a better deal, you’re free to switch over
to that. And they’re obliged to let you take your mobile
number with you. Contract plans, on the other hand, are a great
way to break down the cost of a mobile handset. With premium phones these days costing well
over $1,000 that’s not the kind of money that you’re likely
to just have sitting around in your pocket. And if you do, it’s probably not a concern
to you to spend that much on a phone outright. With a contract plan, you’ll typically pay
handset repayments each month, on top of whatever your contract provision
is. Because you’re signing up with a telco for
a longer period, they’re usually slightly more generous in
terms of data provisions, and other bundled goodies like entertainment,
and quota-free streaming, than they are on prepaid services. Contract plans are generally slightly better
if you’re planning to travel internationally, because usually there are
ways that you can use your service more easily overseas and
at lower cost. Whatever you do though, if you are planning
to travel internationally, make sure you check with your telco what they
will charge you. You can typically use most contract services,
and indeed a lot of prepaid services overseas, but the
rates can be exorbitant if you don’t pre-buy a pack or a range roaming
deal with your carrier up-front. As always, if you’re keen to know more about
mobile plans, if you want to find the latest and greatest
phones or the latest and greatest phone deals, because you’re looking to save some money, you can find all of these details at Finder.com.au Thanks for watching.

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6 Comments

  • Reply Kattiper June 27, 2018 at 6:29 am

    Audio is unclear and low when it interferes with the sound effects but great info. Thanks for explaining

  • Reply Kipper Klank May 15, 2019 at 2:41 pm

    I always advise people to stay away from buying a phone with a contract plan, cuz usually that phone is explicitly for said to carry your such as Verizon or AT&t

    it becomes a huge problem in the Android community when they lock your phone specifically to certain carriers, or have a much tighter security on jailbreaking and rooting,

  • Reply Kipper Klank May 15, 2019 at 2:43 pm

    also, please use a neutral density filter/ crank back the exposure and take careful attention to the audio levels :/

  • Reply Candice Perry September 12, 2019 at 10:49 pm

    I would prefer the contract plan because I don't like buying phone cards everytine

  • Reply Peter Krohn October 11, 2019 at 10:59 pm

    The audio (sound volume) on this clip is unusually low.

  • Reply Rip_Mr_Lobster November 27, 2019 at 12:44 am

    What happens if you dont pay phone contract tho

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