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What Are Postpaid Plans?

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  • Written By: Bill C.
  • Edited By: Jacob Harkins
  • Last Modified Date: 14 October 2014
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Postpaid plans are billing arrangements mobile phone users have with service providers to pay ahead of time for the number of minutes they will use their phones every month. They are the alternative to prepaid plans in which users pay for a given number of minutes ahead of time and usually have to prepay for additional minutes to keep their service from being interrupted or suspended.

Users of postpaid plans generally purchase them because they offer several distinct advantages over prepaid plans. The monthly fee that mobile phone carriers charge for postpaid plans is generally billed at a lower rate per minute than for prepaid plans. Post-paying also provides reasonably good insurance against losing service temporarily or permanently within the limits of the plan. In addition, if a phone with prepaid service gets lost or stolen, the service carrier usually has a record of the phone's serial number, enabling it to block service to and from the phone once the loss is reported. In the same situation, prepaid service for a phone would continue to tick away by the minute until it was used up.

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To realize the advantages of postpaid plans, potential users typically have to wait to receive service access until an application is approved and they pass some sort of credit check — this can usually be accomplished during a short in-store visit or via an online application. Prepaid service, on the other hand, usually begins as soon as the carrier receives payment for the service. Urgency of the need for service can therefore be a determining factor in a user's deciding which type of billing arrangement to make.

Terms of postpaid plans are usually much more complex than simply paying for a given number of minutes every month. Postpaid customers typically receive a quota of minutes for a fixed monthly fee, then pay for additional minutes used in overage charges. Overage fees vary among carriers but can be billed at high rates.

Most mobile phone carriers also charge different rates for different ways the service is used. Users therefore pay different amounts for making phone calls, sending and receiving text messages, using email, and accessing the Internet. Carriers usually provide postpaid customers with an access code that enables them to track their usage by phone or by logging in to an online user site.

Minutes for which postpaid customers incur charges are usually broken down into minutes used during peak usage times and periods of non-peak usage. Peak usage rates are generally billed at a fixed rate. Charges for non-peak usage can vary on a graduated scale from no charge for “anytime minutes” to charges approaching the monthly fee for higher traffic usage times. Typical non-peak billing rate categories include evening and night minutes, weekend minutes, mobile-to-mobile minutes, and anytime minutes. Some mobile phone carriers offer unlimited service for fixed monthly fee that frequently is quite high.

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