New arrivals ask me this constantly in the first week: should I get a proper phone plan or just a prepaid SIM? The honest answer depends entirely on how long you’re staying and whether you have any local credit history yet.
Quick answer: Prepaid plans suit short stays and newcomers with no Australian credit history, you pay upfront with no contract or credit check. Postpaid plans are usually cheaper per GB and often include a phone, but require a credit check and lock you into a contract, generally 12-24 months.
Prepaid: The Default for Newcomers
Prepaid plans work exactly how they sound, you pay for a set amount of data and calls upfront, for a fixed period (usually 28-30 days), with no ongoing contract. When it runs out or expires, you top up again or switch providers entirely with no penalty.
Why most newcomers start here:
- No credit check required, since you’re paying in advance
- No contract to break if you leave the country early
- Available immediately from the airport, convenience stores, or online
The trade-off: prepaid data generally costs a bit more per gigabyte than an equivalent postpaid plan, and you don’t get a subsidised phone included.
Postpaid: Better Value If You’re Staying Long-Term
Postpaid plans bill you monthly in arrears, and typically offer more data, better value per gigabyte, and sometimes a phone included in the plan cost. The catch is they require a credit check, which is where things get complicated for newcomers.
The credit history problem: Australian telcos assess your creditworthiness using local credit history, which you won’t have if you’ve just arrived. Some providers will still approve you with alternative verification (proof of income, a security deposit, or an Australian bank account with some history), but it varies significantly by provider.
Two things about the credit check itself that catch people out: it typically shows up on your credit report but shouldn’t actually affect your credit score, unless you apply to several providers in a short window, which can look like financial distress to a credit scoring model. So don’t “shop around” by applying to multiple postpaid plans at once, compare plans first, then apply to one. Also worth knowing: the 10-business-day cooling-off period under Australian Consumer Law only applies if a salesperson approached you (door-to-door, an unsolicited call, or someone stopping you in a shopping centre). If you walk into a store, call a provider, or sign up online yourself, there’s no cooling-off period, so read the Critical Information Summary before you commit, not after.
Source: ACMA – Understand your phone or internet contract.
A Middle Ground: SIM-Only Postpaid
If you want postpaid pricing without committing to a 24-month phone contract, most telcos offer “SIM-only” postpaid plans, no phone included, shorter commitment (often month-to-month or 12 months), and usually an easier approval process than a full contract with a phone attached.
What Actually Makes Sense for You
- Staying under 3 months: prepaid, no question, a postpaid contract makes no sense for a short stay
- Staying 3-12 months (many working holiday makers): prepaid is usually simplest, though a SIM-only postpaid plan is worth comparing if you plan to stay the full year
- Staying 1+ years or settling long-term: postpaid (ideally SIM-only initially) tends to offer better ongoing value once you can get approved
The Big Telcos vs Budget MVNOs
Telstra, Optus, and Vodafone are the three networks Australia actually runs on. Budget brands (Amaysim, Boost, Belong, and others) are MVNOs, they resell access to one of these three networks at a lower price. Coverage quality depends on which underlying network your MVNO uses, not the brand name on the SIM.
Prepaid vs Postpaid: The Real Trade-Off
| Prepaid | Postpaid | |
|---|---|---|
| Contract | None — pay as you go | Usually 12-24 month contract |
| Credit check | Not required | Usually required |
| Typical cost (per month, mid data plan) | $30-45 | $40-60 (often bundled with a phone) |
| Best for | Newcomers, short stays, no local credit history | Long-term residents wanting a new phone bundled in |
A 3-Month Cost Comparison
For someone on a working holiday visa staying 3-6 months, prepaid at ~$35/month totals roughly $105 over 3 months with zero exit cost. A postpaid plan at a similar data allowance might cost slightly less per month but usually requires a credit check newcomers without an Australian credit history often can’t pass, plus early-exit fees if you leave before the contract ends.
Frequently Asked Questions
Can I get postpaid without an Australian credit history?
It’s difficult but not always impossible — some providers offer “SIM-only” postpaid plans with more lenient checks. Prepaid remains the more reliable option for newcomers.
Which is cheaper long-term?
Postpaid is often marginally cheaper per GB if you stay the full contract term, but prepaid’s flexibility (no lock-in, no exit fee) usually wins for anyone not committing to Australia long-term. See our Best SIM Card guide for specific provider recommendations.
Final Thoughts
There’s no universally “better” option, it genuinely comes down to how long you’re staying and whether you can clear a credit check yet. Most people start prepaid in their first weeks regardless of their plans, then reassess once they’ve settled into a job and a bit of local financial history. For a full comparison of SIM options including eSIM, see our guide on best SIM cards and eSIMs for Australia.
Already settled on prepaid or postpaid but thinking about a different provider? Our guide to switching mobile providers in Australia covers how to do it without losing your number.