PAYG
PAYG or pay-as-you-go is a mobile phone service by which a customer will pay for credit on a handset before it is used. When that credit is used up, the mobile phone company will block further use until more credit is purchased. The system is useful to those who do not wish to enter into a long term, or post paid, contract with a service provider.
Most mobile phone operators provide a variety of ways in which a pay-as-you-go customer can top up their balance. Common methods of purchasing PAYG credit include buying a top-up card from a retailer which has a code on it which can be entered into the phone via the keypad. Other methods include using a debit or credit card or via an ATM.
As there is no necessity for the owner of a PAYG phone to top up their balance, many operators offer time limits on the period a top-up can be used. They also offer incentives to keep topping-up accounts such as free minutes of talk time and free SMS.
As well as often having fewer contractual obligations, PAYG handsets allow customers to keep constant track of how much they are spending on making calls. Those who only use their phones in emergencies can control their budgets in a more transparent way than with a long term contract.
Some disadvantages of using PAYG phones may be higher charges for text messages and calls. The phone may also not work when taken abroad.