Is Prepaid Electricity Cheaper than Postpaid Electricity

Is Prepaid Electricity Cheaper than Postpaid Electricity

Texas provides its residents with a deregulated energy market, which provides monetary and energy-saving options not available in most places around the country. For some Texans, these options are limiting, leaving them unable to purchase electricity through any traditional means. Traditional postpaid plans require good credit, a deposit, and flexibility for the price to change from month-to-month, which can be challenging for many families.

As an added option, there is also a prepaid electricity plan. You may ask yourself is prepared cheaper than postpaid, and in some way, you may be correct. Prepaid electricity plans give a different view of paying for electricity, which could potentially mean money saved.

Read on to learn more about prepaid vs. postpaid electricity plans as a way to help you decide which one is best for you.

Prepaid vs. Postpaid Electricity Plans

Different factors might sway you to decide whether to find a prepaid or postpaid electricity plan. For instance, if you find yourself needing a low energy bill on a one-year-long lease, a postpaid plan may be better for you. However, if you find yourself unable or unwilling to pay the deposit, you may switch it up with a prepaid plan. Here are some of the differences between the two to help you with a decision.

Prepaid Plan

Prepaid electricity plans characterize themselves as requiring a fixed cost payment at the beginning of each month. The customer sets the amount in exchange for a certain amount of electricity that the amount will cover. Though it’s an easy way to avoid any late fees and keep the spending to your budget, once you’ve used all of the electricity allotted, it will get disconnected. To avoid such a problem, you can set up an auto-pay feature through your credit card or bank account.

The nature of this type of plan makes it more flexible and accessible to the broader population in a deregulated market. As mentioned below, various incentives make prepaid plans even more welcoming, especially to those families that find themselves in a financial bind.

Postpaid Plans

Postpaid plans are considered the traditional energy service as you sign a contract with an energy company for a certain amount of time and rate. With this plan, you pay for the electricity once used and not at the beginning of the month, making it change from month to month. A deregulated market promotes competition, which means that a variety of low rates are available.

A postpaid plan may be a good option for a family with a little more flexibility in their monthly budget and the ability to sign a longer-term contract. So long as an individual can show good credit and submit a deposit, there is a potential for saving through the lower rates the contract will lock you into.

Advantages of Using Prepaid Electricity

There are different advantages to using a prepaid electricity plan as opposed to the traditional postpaid plan.

  • Cost Certainty: A prepaid electricity plan allows you to choose the amount you are willing to spend on electricity every month. Having control over this cost makes it easier to stay within a pre-set budget so that you don’t have any surprises at the end of the month.
  • Monitor Consumption: Prepaid electricity plans are known to be more electricity conscious. Generally linked to a smart meter, a prepaid plan will give you visibility over how much you use and how you can save electricity. Not only is this good for the environment, but it can also be a bonus when trying to save money within a budget.
  • Incentive: Whether you’re on a prepaid plan or a postpaid plan, saving electricity is a noble notion; however, there is more incentive with a prepaid plan. If you were to go over the prepaid amount, it becomes an unexpected expense for the month many may have trouble covering.
  • Flexibility: Moving frequently makes it difficult to sign long-term contracts such as those available through a postpaid plan. Prepaid plans solve this problem by allowing the user to pay month-to-month, so you do not have the pressure of potential contract fees should you move sooner.
  • No Credit: Since the amount of electricity used is prepaid before it is used, there is no need to worry about a credit check. Postpaid plans require a certain level of good credit as the payment is provided after electricity is used, which is one hurdle many have trouble jumping through when choosing an electricity provider.
  • No Deposits: For cash-strapped families, making a lump sum upfront deposit is difficult to do with a utility company. Prepaid plans don’t require a deposit, as mentioned above, making them more accessible.

Find the Right Payment Plan

Prepaid and postpaid energy plans have their own benefits and downfalls. Families living in a deregulated market will most likely have both presented as an option and should be reviewed carefully based on individual needs.

A prepaid plan offers quite a bit of flexibility since it does not tie you down to a long-term contract, all the while allowing you to control the amount you spend. Of course, as needs change, so too will the amount you spend. Postpaid plans require a deposit and good credit in order to get you started, which may present a unique hurdle for cash-strapped families to jump through.

Though it’s possible to save money, whether you’re on a postpaid or prepaid plan, there is a certain extra level of incentive with the prepaid plan. Your budget is yours to control, and the prepaid plan will help maintain your level of spending, while still providing your family with the necessary utilities for a healthy and happy home.


Disclaimer: © May 2021 PayGO Distributors, LLC. This is an advertisement for prepaid electric service from PayGO Distributors, LLC., an independent energy sales organization. Energy services are provided by Young Energy, LLC DBA Payless Power REP#10110 and Brooklet Energy Distribution, LLC DBAs Acacia Energy, Snap Energy Latino, and Now Power REP#10137. There is a minimum required payment to establish a connection. Call for more information on minimum required payments, balances, and specific terms of service and promotional details. Utility fees may also apply and may increase the total amount that you pay. Offers subject to termination or change without notice. Se habla Español.

* Rates quoted are at 2,000 kWh per the Electricity Facts Label for Oncor. Please check EFL for your effective rate.

** Order must be placed online before 4pm CST. Meter must not be subject to a switch hold.

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