← Glossary · Plans, billing & data
Postpaid vs Prepaid
Postpaid bills at the end of the month (often with credit check + financing). Prepaid pays upfront. Prepaid is usually cheaper and has no contract; postpaid often includes financing for new phones.
Postpaid and prepaid describe how you pay for cellular service.
Postpaid
You sign up, use service for a month, then get a bill. Carriers typically run a credit check before approving postpaid service. Postpaid plans often bundle phone financing (the cost of a new phone spread over 24-36 months on your bill). Postpaid customers usually get tower priority and other perks (streaming subscriptions, hotspot allowances).
Prepaid
You pay for service upfront. No credit check. No financing — you bring your own phone or buy one outright. Plans are usually cheaper at the same price tier than postpaid because the carrier isn't taking on credit risk and isn't recovering phone-financing costs through the bill.
The tradeoffs
- Cost. Prepaid is usually cheaper (sometimes 30–50%) for the same data tier.
- Phone financing. If you want a new $1000 phone but don't have $1000 on hand, postpaid financing is the only path. Prepaid means buying the phone outright.
- Priority. Postpaid customers usually get higher tower priority during congestion (see deprioritization).
- Family plans. Both prepaid and postpaid support multi-line discounts; postpaid family plans tend to be more flexible.
Most MVNOs are prepaid — that's a big part of why they're cheaper.