The history of the prepaid mobile phone or mobile phones pay and go begins in the 1990s, when larger markets were being sought after by the mobile phone operators. Before this date, all mobile phone services were offered on a post-paid basis, which excluded people with a poor credit rating.
The first pre-paid card was called "Mimo" and was launched by TMN the Mobile Phone Operator of Portugal Telecom in September 1995.
A prepaid mobile phone (also commonly referred to as pay as you go mobile phones, pay-as-you-talk, pay and go mobile phones, or prepaid wireless) is a mobile phone for which credit is purchased in advance of service use. The purchased credit is used to pay for mobile phone services at the point the service is accessed or consumed. If there is no available credit, then access to the requested service is denied by the mobile phone network. Users are able to top up their credit at any time using a variety of payment mechanisms.
A pay as go phones provides most of the services offered by a mobile phone operator. The big difference is that with pay as you go mobiles phones, payment for service is made before use. As calls and texts are made, and as data is used, deductions are made against the prepaid balance amount until there are no funds remaining (at which time, service is no longer available). A user may avoid such a break in service by making payments to increase the remaining balance.
A prepaid plan may have a lower cost (often for low usage patterns e.g. a telephone for emergency use) and make it easier to control spending by limiting debt and controlling usage.They often have fewer contractual obligations – no early termination fee, freedom to change providers, plans, able to be used by those unable to take out a contract (i.e. under age of majority). Depending on the local laws, they may be available to those who do not have a permanent address, phone number, or credit card. This makes them popular amongst students away from their home towns and travelers. Additionally, they are popular with parents who wish to have a way to stay connected with their college age students but do not want the surprise of an unexpected and lofty bill.
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