Phone Plans

Postpaid Phone Plans — Why They Matter to You

Kyle Reyes
September 22, 2022

Are you looking to change your phone plan? If so, then figuring out whether you want to get a postpaid plan or a prepaid plan is a good place to start. There are so many factors in play when choosing a new phone plan, and it is important to choose the right one. Switching plans and carriers are no fun, and you want to make sure you don’t have to switch again for a long while! This article will cover 

  • What is a postpaid phone plan? 
  • Differences between prepaid and postpaid phone plans 
  • How MVNOs fit into the equation
  • And more! 

What is a Postpaid Phone Plan?

Simply put, postpaid phone plans are those where you pay for the month’s service after the month is over. These are contrasted by prepaid phone plans, where you pay before you receive the service. Many companies perform credit checks prior to your plan to see if they trust you to pay your bills on time. These plans are often harder to switch from, but they provide better service and more benefits. 

Traditional Monthly Contract

Postpaid phone plans operate on traditional monthly contracts. If, for example, you purchase a month of a plan from Verizon, you are contracted into using that month and paying at the end of it. There are ways to break the contract, but they are always very, very expensive. Some companies, like Mint Mobile, have contracts that span multiple months. They sell their plans in three, six, and 12-month contracts. They do this while making the longer contracts less expensive per month. They are able to offer significantly lower prices on a 12-month contract because they know the customer is staying for a long time. 

This can be a win for both parties. If the customer is comfortable knowing that they will be on the same plan for a year then they can take advantage of the savings each month. The problem, however, is that not everyone is able to commit to contracts of that length. With a postpaid phone plan, a monthly plan is still a “contract,” but it is a much shorter one. 

Postpaid Credit Check

Since users are signing on for at least a one-month contract, postpaid plans usually come with hard credit checks. These checks are benign as long as you have good credit. Hard checks can, however, damage your credit score if they happen too often. If you are in a position where you’ve had multiple hard checks on your account in the recent past then do extra research into the company before signing on to a postpaid plan — sometimes, companies will automatically do a credit check in the middle of your application. 

Smartphone Payment Plan

Phone bills are a monthly expense. When you are signed onto a multi-month contract it is still common for companies to bill you monthly. Companies also have options to create a payment plan for your smartphone. This is a common practice now that smartphones have risen to colossal prices, the newest models sitting comfortably at over a thousand dollars. They are, however, marketed very differently. Oftentimes they are shown at the low price of $25 or $35 a month, which is the price customers would pay on a three-year plan. Be wary about these two or three-year smartphone payment plans. 

While a few dozen dollars a month will not break the bank, it doesn’t change the fact that the phone is incredibly valuable, and will not be “yours” for multiple years, longer than some people keep their cell phones. Accidents happen, but accidentally breaking a new smartphone in a way that isn’t covered under warranty is a large financial blow. A long phone payment contract has another effect — it, more or less, ties you to the company from where you purchased it. 

For example, buying the newest iPhone at Verizon can come with a three-year payment plan. During the course of those three years, your phone is “locked” to Verizon’s network. This means that you cannot use it on any other networks, a feature that (while it varies a bit for different providers) stays in place until you’ve paid off your phone and own it. Under those circumstances, the customer would, for all intents and purposes, be forced to stay with Verizon until their phone is paid off. 

The ability to pay off a smartphone over a number of months is not necessarily a bad thing, but it locks the user into that provider until their phone is paid off. For people comfortable with their wireless provider it’s not a big problem and it allows for a bit more flexibility in their monthly budget. 

Prepaid Versus Postpaid Phone Plans

What’s the Difference?

While researching the right phone plan for you might not be the most fun, it is important!

Outside of the obvious, there are a few more differences between prepaid and postpaid phone plans because of the way that the payment is constructed. When signing on for a postpaid phone plan, the company knows that their users will stick around for a little while, and they usually provide more benefits along with the base plan. 

Prepaid cell phone plans are often cheaper and are without a contract, while postpaid plans are more expensive but come with more discounts and benefits. Each of these plans occupies a different niche with its own pros and cons. Many providers will have both prepaid and postpaid plan options, and later in this article, we will cover the differences between the prepaid and postpaid options given by the same company. 

Looking at unlimited plans, prepaid plans are, on average, $10 to $20 cheaper each month. That is a pretty nice chunk of cash, especially when looked at a year at a time! If you are primarily interested in saving money on your cell phone bill, a prepaid MVNO plan is the best option for you. 

One area in which postpaid plans shine is in their data speeds. Network performance often prioritizes postpaid plans. For instance, when networks are pushed to their max, companies will start throttling data speeds to certain groups of customers, often decided by the tier of their plan. MVNOs leasing the network will have their data slowed first, then prepaid customers, then the lower tiers of postpaid customers. It does not often get that far, but they do have plans in place if their bandwidth is strained. On a limited data plan, companies will either slow speeds when you hit your cap or make you pay for the next gigabyte of data right away. 

Which is Better for You? 

Two major differences in these types of plans are the cost and the data speed. With a prepaid plan, customers are able to save money each month while dealing with slightly slower speeds in times of high data volume. Postpaid plan users can rest with confidence, knowing that their plan won’t be slowed unless something seriously bad is happening. 

Example Phone Plans

Let’s dive into some popular mobile networks and how their prepaid and postpaid plans differ. This comparison will help show the monetary differences, as it is the same service from the same company. Keep your eyes open while going through this list. You might find something that is right for you! 

US Cellular

  • Prepaid — $50 for unlimited talk, text, and data
  • Postpaid — $65 for unlimited talk, text, and data

As expected, the postpaid plan is more expensive. The postpaid plan comes with benefits that the prepaid does not, including HD streaming (prepaid is SD), a hotspot, and a free movie each month. This is a nice addition, but the majority of that payment is going towards your fast data and streaming. US Cellular, like many carriers’ unlimited plans, has a soft cap on data usage. For this plan, customers get 25 GB of priority data each month, so if you go over your data is slowed until the month is over. 


  • Prepaid — $60 for unlimited talk, text, and data
  • Postpaid — $65 for unlimited talk, text, and data

These plans are very close in price, but the prepaid plan has an additional trick up its sleeve. Verizon’s $65 postpaid plan, their Welcome Unlimited plan, is very bare-bones. It comes with unlimited talk, text, and data. The prepaid plan comes with the same, but they build in some extra savings for customers who stay with the plan for a number of months. As a note, this is not a contract, rather they call it a “loyalty discount.” If you are on a prepaid plan, starting month four you save $5 a month. Starting at month 10, those savings go up to $10 a month. 

That brings the prepaid plan down to $50 a month, which is a substantial amount of savings! It does, however, only kick in after 10 months at either $60 or $55. 

Mint Mobile

  • Prepaid — $30-$40 for unlimited talk, text, and data

Mint Mobile actually only has prepaid phone plans. They offer their plans in three, six, or 12-month contracts. Mint has an exceptionally nice deal for the first three months, where the maximum discount is applied. After that, to keep that price, customers must purchase one year of service at a time. Since Mint Mobile is all prepaid plans, the threat of deprioritization and data throttling is nonexistent! All of their customers receive the same amount of data. With an MVNO, however, customers may experience slower data speeds when the parent company is undergoing bandwidth stress. 


  • Prepaid — $50 for unlimited talk, text, and data
  • Postpaid — $60 for unlimited talk, text, and data

T-Mobile plans operate under similar conditions as the others on this list, providing better data speed to their postpaid plan for a little extra money. T-Mobile is, however, more upfront about their differences in data, as prepaid plans operate on their 3G network, not their 4 or 5G networks. This means it is slower at all times, even when there is not an uptick in use. 

Cricket Wireless

Prepaid — $50 for unlimited talk, text, and data

Just like Mint, Cricket only offers prepaid phone plans. That being said, their unlimited plan is very similar to the prepaid plans available at major wireless companies. Fifty dollars a month isn’t too cheap when it comes to a monthly plan. 

MVNOs in general might lean towards prepaid plans because of the nature of their business and customers. In any case, if you are looking to save money on your monthly plan, then MVNOs are the way to go. As we will discuss later in this article, the major benefit of using an MVNO is that it saves you lots of money. 

Benefits of Using an MVNO

MVNOs don’t have towers, they just use ones built by major carriers! 

Mobile virtual network operators are the names given to all of the phone companies (of which there are many) that operate through another major company's network. The major networks in the United States are AT&T, Verizon, T Mobile, and US Cellular. The major benefit of MVNOs is lowered costs while the major downside is that the major network’s customers get priority during times of high bandwidth usage which results in slower speeds for MVNO customers at that time. 

In the prepaid scenario, the first person to have their data slowed is one with an MVNO. If you want to make sure you have the fastest speeds at all times, then an MVNO is not for you. When you are looking at plans and providers, consider how much you want high-speed data. When your data is throttled (which usually isn’t too often) you can still browse the web, check email, use maps and Uber, and many other things, but everything will take a bit longer. 

Over the years, MVNOs became a very popular and viable option for getting a quality phone plan. This section will discuss how they work as well as some pros and cons of using an MVNO instead of a major cellular network. 

How Does an MVNO Work?

An MVNO is a phone company that supplies phone plans but does not have a network of its own. MVNOs piggyback off of existing cell phone towers of one or multiple major network providers. This will result in customers either getting assigned a network based on where they are located, or, with certain devices, switching from network to network based on which one is fastest where they are. 

MVNO customers have access to the same high-speed network as customers of the parent network, but since the parent network’s customers are prioritized, sometimes their cellular runs slow.

Pros of MVNOs

The big pro of an MVNO is that it can offer cheaper plans than major carriers. Alongside that, MVNOs are able to operate in a different sphere. AT&T is competing mainly with Verizon and T Mobile for its customers while Cricket is mainly competing with other MVNOs. In terms of service, there are not too many differences between getting your cellular plan through an MVNO and getting it through one of the major providers. 

MVNO phone plans are so cheap because they don’t have to run their own network. They can focus on providing high-quality and affordable plans with all of their perks and incredible multi-line discounts since they are not a major service provider. 

Alongside that, MVNOs are not a new kind of service provider. They have provided great service to lots of people for decades, making them a reliable source of affordable phone plans. 

Cons of MVNOs

The major con of using an MVNO is the deprioritized service. When a major company is under stress from high data usage, the MVNOs are the first customers to experience a slowdown in internet speeds. Of course, this does not affect Wi-Fi speeds, just the speed of your cellular data. 

Is a Postpaid Phone Plan Right for You?

If you want to ensure fast service and don’t mind paying a bit extra and getting locked into a contract then postpaid is the way to go. That, alongside the extra gifts that are added on top of some plans, can make it very valuable to customers. Sometimes companies will add subscriptions to streaming services as a part of the plan, which might let customers end their paid subscription and switch to the free one. 

When switching phone plans, there is a lot to consider. There are a tremendous amount of carriers and plans all across the spectrum of what you receive versus what you pay. It is important to research until you know exactly what kind of plan best suits you and then pick a carrier accordingly. Be wary of big marketing headlines, as they often have more strings attached than they may seem. 

Kyle Reyes
Kyles Reyes is a journalist from Pittsburgh, PA that specializes in the wireless industry, phone plan comparisons & advice.
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