How Do Prepaid Phone Plans Work? An Insider’s Guide…


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What’s the deal with prepaid phone plans? How do prepaid phone plans work? Here’s everything you need to know about prepaid phone plans…



Switching to a prepaid phone plan can offer several benefits, whether you own your phone outright or are looking to save on monthly phone bills.

Though phone plans and data allowances may not be the most thrilling topics (I know, understatement of the century), a basic understanding of the INS and OUTS as well as the benefits of prepaid plans can help you save some extra cash.

And let’s face it, in inflation-spanked 2023, we could all do with a little extra cash in our bank accounts every month.

How Do Prepaid Phone Plans Actually Work?

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In its simplest terms, a prepaid phone plan is one of two methods for securing data, calls, and text functionality for your phone, with the other being a postpaid plan.

Postpaid plans, which are usually more expensive and come with additional extras, are paid upfront every month and operate on fixed contracts, usually 12 or 24 months.

With a prepaid plan, you pay ONLY for the data you use (most prepaid plans come with unlimited calls and texts these days). The upshot of this is that you A) get more control over how much you spend per month, and B) you’re not locked into a contractual obligation to a carrier.

Here’s how prepaid plans work:

  • With a prepaid phone plan, you buy a specific amount of call minutes, text messages, and data in advance, which you can then use throughout the month.
  • When your balance runs low, you will need to add more funds to your account in order to continue using the service.
  • You can top up your account manually or automatically, depending on your carrier’s policies. Most carriers offer the convenience of automatic monthly top-ups, which can be set up via a wire transfer from your account.

In this respect, prepaid phone plans are very simple to live with and operate, so if you’re looking for a way to reduce your monthly phone bill, a prepaid plan could be just what the doctor ordered.

You can control exactly much you spend on a month-to-month basis, you’re not locked into any type of contract or obligation to the carrier, and you’re free to switch to another plan whenever you like.

What About Data Allowance?

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With most of the best prepaid phone plans on the market, data allowances aren’t too much of an issue. You can even get prepaid phone plans with unlimited data, although they’re a little more expensive – around $45 per month.

The key USP of prepaid phone plans for most users is how little they cost. You can pick up a plan with unlimited calls and texts and 10GB of data for as little as $15 per month.

All the best prepaid plans come with 5G too, so you’re not limited to older standards like 3G and 4G. And some, like VISIBLE’s excellent prepaid plan, gets you access to Verizon’s Ultra Wide-Band 5G network too.

Ironically, Verizon’s prepaid phone plans DO NOT include access to its Ultra Wide-Band 5G network. Go figure!

How Much Data Do You REALLY Need?

If you actually track how much data you currently use on a month-by-month basis, most people – including myself – will find that they seldom use anywhere near 10GB.

Whether you work from home or in an office in the city, you’ll spend the vast majority of your day connected to WiFi networks which means, in most cases, your internet connection is free.

The only time you’ll tap into your data allowances, therefore, is when you’re out and about and away from WiFi networks, either your home network or the one in your place of work.

And unless you like to watch Netflix in UHD for hours on end on your daily commute, you really don’t need THAT much data to get by. For the vast majority of users – like, upwards of 95% of people – 10GB or 15GB of data is all you’re ever going to need.

And if you don’t use anywhere near 10GB of data per month, why pay for unlimited data? It doesn’t make any sense, fiscally.

Plus, the difference between $15 per month for a plan and $85 per month is pretty significant, especially these days. And that, my friends, is why more and more people, myself included, have switched over to prepaid phone plans.

Here’s the best prepaid phone plans on the market right now, covering every possible budget and requirement.

Latest Smartphone Releases


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  • Google Pixel 9

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  • Google Pixel 9 Pro

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  • Google Pixel 9a

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Best SIM-Only Plans & Deals


  • Boost Mobile Unlimited Premium Plan

    Boost’s top-tier option brings the heat: 50GB of premium data, hotspot, North America roaming, global talk & text, and $430 off select devices. All-in at $60/month with no contract.

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    Data: Unlimited (50GB premium speed)

  • Boost Mobile Unlimited+ Plan

    Level up with 40GB of premium data, hotspot access, global calling, and up to $300 in device savings. All for just $50/month. No contracts and flexible phone options included.

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    Data: Unlimited; Speed Caps After 40GB

  • Boost Mobile Unlimited Plan

    Start strong with 30GB of premium data, unlimited everything, and a killer intro offer: just $15/month for the first 3 months, then $25/month forever. No contracts. No fluff. Big value.

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    Data: Unlimited (Speed Caps Over 30GB)

  • iD Mobile 1 Month SIM-Only: 108GB

    Another high-data, low-cost option with no contract. 108GB for just £9, full 5G access, and the same goodies you get with 12-month deals.

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    Data: 108GB

  • iD Mobile 1 Month SIM-Only: 20GB

    The lowest price option. 20GB for £6 with all the same perks as pricier plans. Great if you don’t use much data and want to save every penny.

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    Data: 20GB

  • iD Mobile 1 Month SIM-Only: 110GB

    This plan gives you big data and zero commitment. 110GB for just £10 with all perks intact. If you need more data but want the freedom to cancel, this is the one.

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    Data: 110GB

  • iD Mobile 1 Month SIM-Only: 60GB

    More data, same price. For just £8/month, you get 60GB on a no-strings 1-month rolling plan. Ideal for users who stream often but don’t want long commitments.

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    Data: 60GB

  • iD Mobile 1 Month SIM-Only: 40GB

    Perfect if you want full flexibility. You get 40GB and all of iD Mobile's perks with no lock-in, annual increases, or setup fees. Great for short-term users.

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    Data: 40GB

  • iD Mobile 12 Month SIM-Only: 60GB

    One of the best pound-per-GB plans around. You get 60GB for £8 with £25 cashback, which means you’re effectively paying closer to £6/month. Includes roaming and data rollover.

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    Data: 60GB

  • iD Mobile 12 Month SIM-Only: 108GB

    This deal gets you a healthy 108GB of 5G data for less than a tenner, with no upfront costs and £24 cashback. All the perks are included too: data rollover, roaming, and loyalty rewards.

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    Data: 108GB

  • iD Mobile 12 Month SIM-Only: Unlimited Data

    This iD Mobile plan doesn’t just compete on price, it’s up there with the best of them. Unlimited everything, a year-long lock-in with no price rises, and £42 cashback straight to your pocket. It’s like getting nearly 3 months free.

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    Data: Unlimited, No Speed Caps

  • Mint Mobile 20GB Plan

    If you're looking to save some cash on your bills, this plan is an awesome option. You'll get 20GB of data per month and 20GB hotspot data allowance. For moderate to heavy users, that should be more than enough. I seldom use more than 10GB of data a month, and I'm always using my phone

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    Data: 20GB