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Pay as you go mobile is a type of cellular phone service where the user pays in advance for minutes used. Minutes are usually bundled in set increments and a customer chooses the amount of minutes to pre-pay. A customer purchases a set amount of airtime and when those minutes are used up, the user purchases more minutes to be able to make more calls.
This is in contrast to cellular phone services, where the subscriber pays a set monthly fee for an allotment of minutes. If the subscriber uses more minutes in one month than provided for under the plan, the subscriber would have to pay additional charges above the set monthly fee for the extra minutes used. Conversely, if a customer uses less minutes than included under the plan’s monthly fee, those minutes are typically lost and do not carry over into the new month. There are plans on the market that allow customers to carry over unused minutes from one month to another.
Traditional cellular phone plans may require a one or two year commitment and fees for the early termination of the service. In the United States, major providers charge an average early termination fee of $200.00 United States Dollars(USD). Pay as you go mobile service allows a customer to stop paying for service whenever they choose with no termination fees. In addition, pay as you go mobile plans do not require a credit check, which is helpful to those with no, limited, or negative credit history.
Other reasons that customers select pay as you go mobile over traditional cellular phone plans are the flexibility it offers in managing phone usage and monthly costs. With a pay as you go mobile phone, once the minutes are used up the phone cannot be used again until additional minutes are purchased. This allows a customer to set phone usage limits and prevents the customer from incurring unplanned charges for extra minutes used. There are also no monthly bills with pay as you go plans.
Some disadvantages of prepaid mobile service are the limited selection of available phones and higher per minute calling fees than traditional cellular plans. Most providers also have their pre-paid minutes expire if not used within a set amount of time after purchase. One of the biggest disadvantages to pre-paid service is that the user who cannot afford to pay for more minutes is unable to use their phone until they can purchase new minutes.