Prepaid vs. Traditional: Which Electricity Plan is Right for You?

Since Texas has a deregulated electricity market, you have the freedom to choose an electricity provider. However, choosing one can be an overwhelming process, especially since there are many options out there. When it comes to picking an electricity plan, there are two common types: traditional and prepaid. The one that’s right for you depends on your financial situation and preferences. Read on to learn about the difference between prepaid and traditional electricity plans to determine which one is the best option for you:

What’s a traditional electricity plan?

A traditional electricity plan is what people are most familiar with. With this type of plan, you pay one large bill at the end of each month for how much electricity you use. This structure usually requires a credit check and deposit when you sign up. Often, you’ll find that these types of plans have long contract requirements that don’t allow you to switch to another provider or plan without having to pay a fee. While the monthly billing structure of a traditional plan is simple, it can be easy to lose track of how much energy you’re using, leading to surprise bills at the end of the month.

What’s a prepaid electricity plan?

Many people are less familiar with prepaid electricity. With these plans, you pay for electricity in advance. It’s like putting money on a prepaid phone—you pay for the service before you use it. You’ll add funds to your account as needed, and when your balance runs low, simply top it off. This type of structure is also called the “pay-as-you-go” model that helps you avoid surprises when the bill comes around. 

What are the key differences between them?

While both plans give you access to electricity, the way they’re set up is quite different. Understanding these differences can help you make the decision that best benefits you and your family. Here are some of the main differences between prepaid and traditional electricity:

• Billing structure: With traditional plans, you pay your bill at the end of the month based on your usage. Prepaid plans allow you to pay for electricity in advance, or as you go, giving you control over how much you spend and when.
• Credit checks and deposits: Traditional electricity providers generally ask you to share your social security number to run a credit check. This often ends in you having to pay a deposit to start service. Prepaid plans don’t require credit checks or deposits, since you pay for service before you use it.
• Upfront costs: Many traditional electricity plans require you to pay various fees upfront before power can be turned on, including service fees and connection fees. Prepaid power from Pronto Power doesn’t require you to pay service or connection fees if your home has a smart meter. All you have to do is put the initial funds into your account, and you’ll have power until that amount runs out or you load more funds.
• Contract requirements: While most traditional electricity providers require you to sign long-term contracts locking you into service while they hike up the rates, this isn’t the case with prepaid power. You can enjoy low rates without the commitment or fees if you decide to adjust your plan.
• Usage tracking: Since prepaid power is pay-as-you-go, you have the ability to see how much power you’re using in real time. Whereas, traditional power plans charge you all at once for the power you used for the month, limiting your ability to track your consumption or identify areas for savings.

Why choose prepaid power?

With prepaid power, you’re in the driver’s seat. No surprise bills at the end of the month, no credit checks, no deposits and no long-term contract requirements. You can monitor your usage in real time, which helps you stay on top of your energy habits and adjust them accordingly to save money. You choose when to load funds to your account, whether it’s daily, weekly, monthly or by pay period. It’s a simple, straightforward option that offers flexibility and control over your budget.

Who benefits from prepaid power?

Prepaid power plans are great for people who like to track their expenses closely. If you prefer to know exactly how much energy you’re using at any given time, prepaid electricity offers that peace of mind. It’s also a good option for people who don’t like the hassle of long-term contracts, including renters and frequent movers. For those who have less than perfect credit or simply don’t have the money to put down a deposit, prepaid electricity offers a simple way to power your home without the extra steps. Here are some other groups that benefit from prepaid power:

• Senior citizens.
• Families on fixed incomes.
• College students.
• Freelancers and small business owners.
• People without a social security number.

Now that you know the difference between prepaid power and traditional electricity plans, you can choose what works best for you. If you’re ready to get started with no credit check, no deposit, and no contract prepaid power, give Pronto Power a call at (844) 621-2852 or contact us online!