Low-Income Mobile Services: Prepaid vs. Postpaid vs. Metered

Low-income Americans face challenges when it comes to accessing affordable mobile phone services. With the shift from traditional landlines to wireless services, many low-income households rely exclusively on mobile phones for their communication needs. However, the costs of mobile phone services can be prohibitive for those with limited incomes. Prepaid, postpaid, and metered plans each have advantages and disadvantages when it comes to affordability and cost predictability. This article provides an overview of the different types of mobile phone plans available to low-income consumers and factors to consider when choosing a plan.

Prepaid Plans

Prepaid mobile plans require you to pay upfront for a set amount of minutes, data, and/or text messages. With prepaid, you pay in advance for what you plan to use during the month. Here’s how prepaid wireless plans work:

  • You choose a prepaid plan based on how much mobile service you expect to use. Options often include limited, moderate, or unlimited minutes, texts, and data.
  • You pay for the entire month’s service up front. Prices typically range from $20-$50 per month depending on the features included.
  • Once you use up the allotment of minutes, data, or texts in your plan, you will not have access to those services until you pay for another month of service or add money to your account to cover overages.
  • Unused allotments do not roll over to the next month. You start fresh each month.
  • Many prepaid plans have no contracts so you can cancel anytime.

The major advantage of prepaid wireless plans is the ability to control your spending by paying upfront for only what you need. There are no surprise overage charges. It also helps those with lower incomes or bad credit get affordable cell phone service without passing a credit check. However, prepaid does not offer the same level of service and perks as postpaid plans from major carriers.

Postpaid Plans

With postpaid plans, customers pay a monthly bill after using services each month. Phone companies typically run a credit check when signing up for postpaid plans. The bill at the end of each month is based on actual voice minutes, text messages, and data usage. Postpaid plans often include unlimited voice minutes and texting, with data being the main variable cost. According to Navigating Cost Structures Comparing Postpaid vs Prepaid Wireless Data Plans, the average monthly cost of a postpaid data plan is around $80, which includes a sizable data allowance and unlimited calling.

Postpaid plans allow customers to pay in arrears after seeing their actual usage for the month. This can make budgeting easier compared to prepaying for an estimated amount of services. However, postpaid plans often come with longer term contracts, early termination fees, and require a good credit score to qualify.

Metered Plans

With metered plans, you pay for only the data you use each month [1]. This can be a cost-effective option for light or moderate data users who don’t need unlimited high-speed data. Metered plans charge a base monthly fee that includes a set amount of full-speed data, usually a few gigabytes. If you exceed that amount, your speed may be throttled or you may be charged overage fees per gigabyte.

The advantage of metered plans is that they allow you to tailor your cell phone plan based on your actual monthly usage. You’re not paying for unused data each month. However, you do need to track your usage carefully to avoid overages. Some providers like T-Mobile now cap overage fees after a certain point [1].

Metered plans can also encourage more conscious data usage since there are direct costs associated with heavy streaming or downloading. Just beware of speed throttling when you hit your monthly data cap, which can slow your connection to 2G speeds.

Pros and Cons

Pros and Cons of Prepaid Plans

Prepaid plans have several advantages over postpaid plans:

However, there are some potential disadvantages as well:

  • May need to manually top up account balance
  • Fewer plan options and features available
  • No device financing options
  • No built-in roaming or international options

Pros and Cons


Here are some of the pros and cons of postpaid mobile plans according to WhistleOut (source):


  • No excess charges on some plans
  • Usually come with a range of perks like extra data or entertainment subscriptions
  • You can get the latest phones on a payment plan
  • International roaming may be included
  • Higher data allowances than prepaid


  • More expensive monthly fees than prepaid
  • Longer contract terms like 12 or 24 months
  • Early termination fees if you cancel before contract ends
  • Monthly bills can vary if you go over data or call allowances
  • Requires a credit check

According to Savvy (source), some other key pros of postpaid plans are that they typically offer more data and features than prepaid plans. However, a con is that they are generally more complex with elements like subsidies for new phones that can obscure the real costs.

Pros and Cons of Metered Plans

Metered plans have some advantages and disadvantages compared to prepaid and postpaid plans:


  • Only pay for what you use – With a metered plan, you are charged based on your actual data usage each month, rather than paying for a set amount of data. This can save money if you don’t use much data.
  • No overage fees – Since you pay per gigabyte, there are no penalties for going over a data cap like with some other plans.
  • Flexibility – Metered plans allow you to easily scale your data usage up or down each month based on your needs.


  • Hard to predict costs – Your bill will fluctuate month to month depending on consumption, making it difficult to budget.
  • Can become expensive if usage increases – There is no data cap, so costs can grow rapidly if you use more data than expected.
  • Need to monitor usage – You have to keep track of how much data you’re consuming to avoid unexpected charges.

Overall, metered plans offer flexibility and only paying for what you use, but the unpredictable costs require diligent monitoring of use.

Choosing the Right Plan

When choosing a cell phone plan on a limited income, there are several key factors to consider:

Usage needs – Assess how many minutes, texts, and data you expect to use each month. This will help determine if a prepaid, postpaid or metered plan makes the most sense. Those who use very little may do fine on a prepaid plan with limited minutes and texts. Heavy data users may need an unlimited data postpaid plan.

Network coverage – Make sure to choose a carrier that offers strong coverage in your area. Review carrier coverage maps to compare. Regional carriers like Consumer Cellular use larger networks like AT&T and may offer savings.

Plan flexibility – Prepaid plans tend to be less flexible than postpaid. However, some prepaid carriers like Metro by T-Mobile offer unlimited plans with mobile hotspot and streaming benefits.

Affordability programs – Take advantage of Lifeline and state programs to save money each month. The Affordable Connectivity Program also provides up to a $30 discount on plans.

Family plans – If covering multiple lines, look into shared plans or family plans that allow pooling of minutes, texts and data. This can help maximize value.

Phones – You’ll often save money by bringing your own compatible device. But some plans include free or discounted phones. Just be aware of installments or long-term commitments.

By weighing factors like these, you can find the right plan to match your budget and needs.

Finding Affordable Options

There are a few options available to make mobile phone service more affordable for low-income households:

Government Programs: The federal government offers programs like the Affordable Connectivity Program that provides discounts on internet and mobile service. Households that meet income requirements can get up to $30/month off their mobile bill.

Family Plans: Sharing a family plan with multiple lines can lower the cost per line significantly. Carriers like T-Mobile offer plans where each additional line costs just $15-25. Splitting a family plan with others is an easy way to save.

Prepaid Plans: As mentioned above, prepaid plans often have lower monthly rates than postpaid plans, so they can be more economical if data usage is low.

Buying Used/Refurbished Phones: Purchasing used or refurbished phones, instead of new, high-end devices can save hundreds of dollars upfront.

Payment Assistance: Some carriers like T-Mobile offer payment assistance programs to help cover bills during financial hardship. Contact carriers directly for availability.


When choosing between prepaid, postpaid, and metered mobile plans on a limited budget, it’s important to consider your expected usage and financial situation. Prepaid plans allow you to pay upfront and avoid surprise overage charges, but may require topping up frequently. Postpaid plans offer more flexibility but you must pay the bill each month even if your usage was low. Metered plans charge only for what you use which can be cost-effective if usage is very low.

For most low-income users, a prepaid plan is likely the best option since it helps control costs. Compare different providers’ prepaid plans to find one with rates and features that fit your needs. Consider getting a basic phone instead of a smartphone if that saves substantially on the plan rate. Enable auto-refill on your prepaid account so you don’t experience interruptions in service. Monitor your usage periodically so you can switch plans if needed. With the right affordable prepaid plan for your usage, you can enjoy the convenience of mobile service without breaking your budget.

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