Prepaid plans are a flexible choice in the energy marketplace, but they aren’t for everybody. Here are some more pros and cons of prepaid energy plans.
Who should get prepaid electricity?
Prepaid electricity often is a good option for customers with less-than-perfect credit. But prepaid plans can be advantageous for other reasons too. Here are a few scenarios where a prepaid electricity plan might be the best choice:
- Families with limited income
- Individuals trying to sign up for power without upfront costs
- Families or individuals who will be moving soon, or who move frequently
Who should not get prepaid electricity?
As you can see, prepaid plans are great if you don’t want to pay a deposit or have bad credit. They allow you to know in advance what you owe and manage usage as the month progresses. But there are also some downsides.
Disadvantages of prepaid energy:
- You have to pay in advance. If you’re already worried about paying a deposit, this might not be any better.
- You also must keep a minimum account balance. If you frequently find yourself needing more electricity than you paid for, this could become a problem.
- While prepaid electricity plans don’t include early termination fees to keep you from switching before a contract ends, rates often are higher than traditional plans.
Despite these drawbacks, prepaid plans are beneficial to many because they don’t tie up funds in a huge deposit. Customers for whom money is tight, such as the Texas residents who recently have been homeless or between jobs, can manage their use to keep costs down.