Is A Prepaid Phone Right For Your Kids?


WhistleOut
27 February 2015

Buying a cheap phone outright for your child, or even giving them your old phone when you upgrade, is a pretty common theme. It’s also a great idea, because you can save money by putting them on a no-contract plan that is either prepaid or a SIM-only month-to-month. So which do you pick?

Each has benefits and draw-backs, and which one you choose will depend not only on your wallet, but your parenting style.

SIM-only benefits

SIM-only plans are cheaper than contract plans because you don’t have to factor in a subsidised phone. There’s also no contract, which means you can cancel the plan with only 1 month’s notice.

In most ways they still function a lot like a regular plan. If you go over your data, call or text restrictions then you’ll be charged an applicable fee for over-use.

The important factor here is that you don’t get cut off when your monthly allocation is burned through. Some parents don’t like the idea of their kid being without the ability to call home in an emergency, as can happen with prepaid.

Some SIM-only examples Telstra Optus Vodafone
Contract Month-to-month Month-to-month Month-to-month
Per month $45 $30 $30**
Calls and text
(standard national)
$550 value calls and MMS
Unlimited texts
300 minutes talk
Unlimited MMS/SMS
$500 for calls & MMS
Unlimited text
Data 2GB* 1.5GB 1GB***
Overage fees 3c per MB
40c flagfall, 99c p/min. calls
50c per MMS
$10 per 1GB
$10 per 300 mins
$10 per 1GB
40c flagfall, 98c p/min calls
Min. cost over 12 months $540 $360 $360
Check out
the plans
More plans More plans More plans

*2GB includes bonus 1GB (offer ends April 27) + 500MB Telstra upgrade option.

**$30 price tag includes $5 off until March 31.

***Vodafone prepaid offers UNLIMITED data on weekends until April 26.

Prepaid benefits

Prepaid tends to be a little cheaper than SIM-only, but doesn’t have the safety net. Once your cap is burned through, that’s it. You can receive calls and texts, but not respond. The only call you can make is to 000 Emergency Services.

The benefit from a parents perspective, other than the cheaper base cost, is two fold:

  1. You’re not risking paying extra each month in often-costly overage fees.
  2. Some parents like the idea of a finite set of credit that the child must learn to be responsible for themselves.
Some prepaid examples Telstra Optus Vodafone
Credit expiry 28 days 30 days 28 days
Price $30 $30 $30
Calls and text
(standard national)
$250 value calls, text and MMS
350 minutes talk weekdays
Unlimited calls on weekends
Unlimited MMS/SMS
$450 value calls and MMS
Unlimited text
Data 800MB 1.5GB 1GB*
Overage fees n/a n/a n/a
Rough cost over 12 months* $390 $360 $390
Check out
the plans
More plans More plans More plans

*Assuming you make it to the end of each recharge period.

Of course, there are plenty of other options outside of the big 3 telcos. For more info and plans, check out our plan comparison generator. It's free, easy to use, and you may end up saving a bundle.

Original image credit: Flickr user Garry Knight


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