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Mobile Plans – Pre Paid vs Post Paid

In the 21st century, a mobile phone has probably become our most prized possession. It isn’t just a gadget used for calling anymore. It has got all the possible functionalities to keep a human engaged. And all of that functionality is tied to the internet. Hence it doesn’t come as a surprise that telecom companies have been offering innumerable cellphone plans.

Like these Swedish mobile subscriptions. Each with a different purpose, longevity, and features. If we had to bucket these plans into two broad categories, they would be pre-paid and post-paid. On analysing, the two plans may even resemble the functionality of debit and credit cards. Let’s understand how different these plans are and how they can be correlated to debit and credit cards.

What is a Pre-Paid mobile plan?

In a pre-paid plan, a subscriber is supposed to pay for the plan in advance. The plan maybe for a few weeks or a couple of days. These plans are usually opted for by those who have specific short-term requirements or those who prefer to know from before how much they use and spend for in a specific period.

What is a Post-Paid mobile plan?

On the other hand, in a post-paid plan, the customer has to pay a monthly bill. It is charged after usage. While a base price for the features being used is known to the customer, the final price depends on the total usage in the given period. Pre-paid and post-paid both have their own perks.

Pros of Pre-Paid plans

Pre-paid plans are more flexible. If someone wants more data instead of talk time, a suitable plan can be chosen for a specified period and then changed subsequently. But be weary of coming prices in Europe and across the world. Especially after Brexit as reported by BBC. There is an immense choice in duration as well. You could choose plans from a day to as long as 3 months in some cases. It is also much easier to change pre-paid plans at any point which isn’t the case with post-paid. To change a post-paid plan a customer needs to contact the company executives to provide details and in general, it is a longer and more cumbersome process.

Pros of Post-Paid mobile plans

Post-paid plans have their own benefits. Since operators want you to continue with extended plans, they prefer customers choose a post-paid plan. Hence there are benefits and offers that come with a post-paid plan. You may get an OTT subscription complementary or have your data doubled at times. For a similar purpose, customer service is much more prompt in post-paid plans. They will ensure they look out for your problems and have them sorted at the earliest. Data usage is also a lot more efficient in post-paid plans. While in prepaid there are data caps at 1GB or 2GB a day, post-paid plans usually have monthly caps which are more convenient and at times even offer unlimited data plans. It can also be said that telecom providers ensure better data coverage to post-paid plan customers more often than not.

There is no better or worse between the two. It completely boils down to the requirement of a customer and what they need in their plans. Now how exactly are these plans similar to debit cards and credit cards?

Comparison with Debit and Credit Cards

Credit cards can be compared to post-paid mobile plans while debit cards to prepaid mobile plans. How you would ask? Here is how.

Let’s talk about the functionality of the two types of cards. While making payments for a debit card, the amount is already present in your bank account. You already know how much you can spend and hence do so accordingly. In credit cards, however, there is no real threshold apart from a sufficiently high limit. You could end up spending 30k or 1L that completely boils down to your usage.

This is comparable to pre and post-paid plans. In pre-paid plans you know the amount of data you can use per day and how much you are going to be paying for a particular month. In post-paid, there is no upper ceiling. Depending on your usage, an amount is added to the base price.

Offered perks and discounts

A point of comparison can also be made with regards to perks offered and what operators hope for. Like telecom operators would rather have you choose post-paid plans as they offer regular revenue for them, credit card operators want you to choose them. They make money on missed payments and other such aspects and hence want you to stick to credit cards. And to incentivize you, there are multiple offers, discounts, and cash backs that you receive on them which you don’t on debit cards. While it is widely believed that using credit cards can make you financially indiscipline, it is also true that if you are able to manage, credit cards can be a wonderful financial product.

Be it mobile plans or financial; products like debit and credit cards, make informed decisions. Go through all possible pros and cons of each of them, match them with your needs and requirements, and opt for the option that suits you the best. Apply this principle in all financial decisions of yours, and you are likely to never go wrong with money!