Pay as you go mobile phones: A guide

If you’ve heard the term “pay-as-you-go mobile phone” and are wondering what it is, simply put, “pay as you go mobile” is another name for “Prepaid mobile”. Prepaid mobile phones have been around for roughly 20 years and their boom in popularity came in the early 2000’s, as the technology became more viable. Is a pay as you go (PAYG) phone right for you? Read on for the ins and outs of prepaid mobile.

Prepaid mobile phones: Pay as you go options

The history of pay as you go mobile phones dates back to the early 1990’s, when American telecommunications company Banana Cellular offered the system using a “hairpin solution”. This meant that customers paid for the service, then were routed through a special switchboard to verify their credit before the call was patched through; a cumbersome system. Current pay as you go phones use an out-of-band signalling system to set up the call quickly.

Pay as you go simply requires the customer to buy credits for the mobile phone, call the number provided and enter a code. Call credit can then be used until it expires. Of course, if you need a mobile handset too, costs vary depending on age and features, however you will always be looking at an up-front, lump cost.

Advantages of pay as you go mobile

If you’re looking to manage your mobile spend, prepaid mobile is almost certainly the best way to go about it. While there are pros and cons to both mobile contract plans and prepaid mobile, here are some of the advantages of going down the pay-as-you-go path:

Prepaid allows those with a poor credit history, no current address, or other credit issues, who may be ineligible for contract plans, to sign up
Prepaid prevents over-spending and large bills that are difficult to pay
Prepaid allows young people, who may be ineligible for a contract plan, to sign up
Prepaid allows teens, who may otherwise run up huge bills, to avoid bankrupting their parents!
Prepaid comes with no commitment – perfect for those wishing to avoid restrictive contracts

Given the fact that prepaid mobile users don’t need to be registered in many countries, PAYG services can also offer some privacy. However, in Australia users of PAYG services are registered, a move that prevents the anonymity of the system from being abused.

Pay as you go mobile: Further info

If you’re interested in the prospect of getting a mobile phone and making calls without being tied to a contract, it’s definitely worth viewing some prepaid mobile deals (we have plenty here on Phone Buddy) and weighing up what you get for your money. You can almost never do too much research, so look at plenty of options before deciding. Ultimately though, the beauty of prepaid mobile is that you can switch away from it at any time, should you choose to opt for a contract plan instead.

Given the advantages of prepaid mobile - control over finances, cheap cap deals, and freedom from punishing contracts – it’s a very popular way to own a mobile phone.