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The Pros and Cons of Prepaid Electricity Plans in Melbourne

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The Pros and Cons of Prepaid Electricity Plans in Melbourne

Nowadays, prepaid electricity plans are becoming more popular in Melbourne. These plans allow users to make payments for the electricity before using it while the postpaid plans allow users to make their payments after using the electricity. These plans have their advantages and disadvantages. In this article, we will assist you in comparing the different prepaid electricity plans available in Melbourne So you can decide which one is right for you.


What Are Prepaid Electricity Plans?


First, we have to understand how prepaid electricity plans work before we discuss the pros and cons of these plans. In a prepaid plan, you can purchase a certain amount of electricity that you need. It is moreover like a prepaid phone service plan. There are also many methods of adding credit to your account, including online payments, at stores, and through the mobile application.


Pros of Prepaid Electricity Plans


Better Budget Control

A good thing about the prepaid electricity plans is that it will help to manage your expenditure. It operates only on the electricity that you have paid for, thus avoiding the situation where you receive a huge bill at the end of the month. This way, you are fully aware of the amount of money you spend, therefore, it will be easier for you to adhere to your budget.

No Credit Checks or Deposits

Prepaid electricity schemes are generally not credit-based, and customers do not have to pay large initial amounts. This is well suitable for individuals with a low credit rating or those who have recently relocated to the country and therefore have not built credit history. This also helps to increase the number of people who are able to access electricity.

Instant Feedback on Usage

Such plans also include the tools and apps which help to indicate how many kilowatts you consume at a certain moment. This lets you know how much energy you are consuming as this will make you consume less electricity hence saving your money. For instance, if your balance is dropping quickly, you can decide to switch-off the light or remove any appliances that are not in use.

No Late Fees or Disconnection Fees

The fact that you pay a certain amount of money and you get electricity for the agreed time means that you don’t have to deal with problems such as disconnection for failure to pay the bill within the stipulated time. This is advantageous for those who find it hard to meet their bills’ due dates or those with irregular income sources.

Encourages Energy Efficiency

Being aware of how much electricity is being consumed may make one more cautious about energy usage. It shows one’s habits that help save money and the environment by allowing one to use less energy in one’s plans.


Cons of Prepaid Electricity Plans


Higher Cost Per Unit

The primary disadvantage of prepaid electricity plans is that they cost more per unit of electricity than postpaid ones. Prepaid plans, as much as they are convenient, are usually expensive, so if you consume a lot of electricity, you will end up paying a lot of money.


Need to Monitor and Recharge

It confines your electricity consumption, and you must make sure that you have to put in more credit when required. If you forget, you could be in a situation where you are out of electricity and have no way of getting it. This can be a big issue, especially during summer or winter when the effect of the weather is very extreme.


Fewer Plan Options

Prepaid plans offer a limited choice compared to postpaid plans. Choosing a plan that meets your requirements can be challenging as they are not as standardised. Furthermore, one will have no way of knowing whether or not there are special offers on the postpaid plans offered by the service provider.


Risk of Disconnection

If you exhaust your credit limit, you may find that your electricity is disconnected as soon as possible, even if you have not been charged a late fee. This is very inconvenient for users because it can happen when they cannot recharge the credit, for instance, during weekends or over the holidays.


Less Predictable Costs

The plans are convenient when used for daily or weekly spending, but they may not allow for better planning of the months’ consumption. It is to be noted that sometimes electricity prices fluctuate, and if you opt for a prepaid plan, you may be charged much when prices are high.


Is a Prepaid Electricity Plan Right for You?


Here are some factors that may help you decide whether a prepaid electricity plan is right for you. However, always consider your own circumstances and requirements. If you enjoy setting your spending limit, getting immediate feedback on your usage or have a poor credit score, then a prepaid plan would work in your favour. However, suppose you want to have a fixed monthly bill, different rates and no need to supervise your usage constantly. In that case, you may find a postpaid plan more suitable.




Prepaid electricity plans in Melbourne are becoming a new convenient model for energy consumption expenses. They are more advantageous than dug accounts, including giving tighter control on spending, no credit checks, and real-time usage reports. But they also have their drawbacks, for example, relatively higher prices per kilowatt, the need to monitor your usage, and the possibility of having no electricity. In this way, by considering these points for and against prepaid electricity, you can weigh your decision. The final thing is that it does not matter if it is a prepaid plan or a postpaid; just select a plan that is affordable for you and a suitable one.