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Why Prepaid is becoming more mainstream for Millennials.

Updated: Jul 3


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It is a commonly held belief that millennials are having a hard time keeping up with their phone bills. This is largely due to the increasing cost of mobile phones, the rise of monthly contract plans, and other financial obligations.


According to a survey conducted by Bank of America in 2018, about 73% of American parents reported providing some financial support to their young adult children. This support included paying for things like phone bills, rent, and groceries.


Another survey by LendEDU found that 37% of millennials (defined as those between the ages of 25 and 34) have their parents paying at least part of their phone bill. This was the most common type of bill that parents helped their children pay.


While there are many reasons why young adults may need help paying their phone bills, one contributing factor is the high cost of phone plans. According to a 2021 report by the Pew Research Center, the median monthly cost of a smartphone plan in the US is $80. This can be a significant expense for young adults who are still in school, working entry level and minimum wage jobs or find themselves burden with the rise in the cost of living.


Not only that, they are 64% more likely to also be financing a smartphone which adds to their monthly cost by as much as $30 per month.


Here are some primary reasons why millennials need help paying phone bills:

  • Opening a single new line with a major carrier can cost $80-$100 per month

  • Getting a contract with large carriers requires some decent credit scores and most millennials either have zero credit history or all those credit cards balances in college have caught up with them.

  • Excessive fees generated by postpaid carriers may exceed budget

  • With the significant increase in the cost of living, millennials are needing more and more help and believe it or not, their phone bills are usually their biggest priority.


As the cost of living has gone up in recent years, phone plans have not adjusted to accommodate current economic conditions. Additionally, the continued launch of new smartphones means that the prices of these devices have tended to increase with each new release, making them even more unaffordable for many millennials.


Why prepaid is becoming more and more mainstream than postpaid


  1. Affordability: Prepaid plans are cheaper than traditional postpaid plans from major carriers, which can be beneficial for millennials who are often on a tight budget.

  2. Flexibility: Prepaid plans offer more flexibility in terms of contract length and commitment. Prepaid plans are month-to-month, allowing millennials to switch carriers or plans as needed without having to worry about early termination fees or collections on their credit.

  3. No credit check: Prepaid plans do not require a credit check, which can be beneficial for millennials who may not have an established credit history.

  4. No hidden fees: Prepaid plans are often transparent, with no hidden fees or surprises. This can be beneficial for millennials who are looking for an easy-to-understand plan without any complicated fees, contracts or plan surprises.

  5. Customization: Prepaid plans offer customizable options, allowing millennials to choose the amount of data, minutes, and texts they need on a monthly basis. This can be beneficial for those who do not use their phone as much and do not want to pay for extra services they won't use. (This is why Tesix Wireless is a all in one mobile plan carrier).

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