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When it comes to mobile phones and mobile network providers, the term ‘prepaid’ often comes up. We’ll explain what it actually is and whether prepaid is right for you, or whether you’d be better off with a traditional contract.
Prepaid: What is it?
The English term “prepaid” can be translated as “paid in advance” or “upfront payment”. It refers to a payment model in which the customer purchases credit in advance. They can then use this credit later as and when they need it.
- The prepaid model is mainly used for SIM cards for mobile telephony. There are several prepaid providers in Germany. The best known are Aldi Talk, Ja Mobil, Edeka Mobil, Congstar, Fonic and Blau.de.
- Prepaid explained using Edeka Mobil as an example: Order a SIM card online via the Edeka Mobil website or buy one in-store at an Edeka supermarket. The SIM card, which comes with a starting credit of 10 euros, also costs 10 euros.
- Insert the SIM card into your mobile phone; with this tariff, you pay 9 cents per minute or per text message. Alternatively, you can also book various flat-rate plans. All charges incurred are deducted directly from your credit.
- Once you have used up all your credit, you will no longer be able to make calls or send text messages. You can, of course, still receive calls and messages. You can top up your credit either online via Edeka Mobil by having the amount deducted from your bank account, or by purchasing a top-up code in-store at an Edeka supermarket.
The advantages of pay-as-you-go
- The biggest advantage is the cost. Prepaid providers often offer very affordable flat-rate plans.
- Furthermore, you are not tied to a contract term. If you no longer wish to use the SIM card, you can simply use up the credit and throw the card away.
- As there is no monthly fee, you also have full control over your costs.
The disadvantages of pay-as-you-go
- Once your credit has run out, you can neither go online nor make calls. However, you will be notified by text message as soon as your credit is running low.
- Many providers also offer automatic top-ups via direct debit. However, this defeats the purpose of the pay-as-you-go model.
- The only major drawback lies in the restricted features. Many prepaid users do not have access to the 4G network and cannot set up a hotspot on their smartphone. Such features are often reserved for contract customers.
