A prepayment meter isn’t for everyone, but if you want to compare utilities it’s worth looking at prepayment versus credit meters. They both offer pros and cons and which one you opt for really depends on how you want to manage your energy, from a financial point of view.
To help you work out what’s best for you, we’ve worked out a quick rundown of what each meter can offer.
What is a prepayment meter?
A prepayment meter allows you to pay for your energy before you use it. You can usually do this using a card, key or vouchers. So, rather than paying a monthly or annual amount for your energy – after you’ve used it – you load the card or key with payment upfront, then use the energy until the meter needs topping up again.
Think of it like a pay-as-you-go mobile phone contract. The upside of a prepayment meter, is that it helps you keep a close eye on your energy, because you can only use what you’ve already paid for. This also means you can avoid any surprisingly big bills at the end of the month.
The downside, is that prepayment tariffs tend to be pricey. If you want to compare electricity prices or gas tariffs, you won’t have access to some of the best cheap energy deals or cheapest gas and electric suppliers – meaning you’ll probably pay more for your energy overall. The other important thing to consider with a prepayment meter, is that when the credit you’ve added to the meter runs out, so does your energy and you will be cut off.
You can still compare gas and electricity prices and switch suppliers if you have a prepayment meter, but you would have to move to another prepayment contract or have a new meter installed to access some of the cheapest gas and electric suppliers.
It’s also worth noting that prepayment meters are due to be phased out when smart meters are rolled out across the country. This is due to happen in 2020.
What is a credit meter?
A credit meter allows you to use the energy first, then pay for it later. You’ll normally pay for your energy monthly, quarterly or annually. The upside of a credit meter is there’s less risk of your energy being cut off (unless you get into serious debt, of course!). You can usually get better cheap energy deals than you can with a prepayment meter – you should compare utilities to see how much you might save.
The downside is, if you use a lot of energy through the winter, or over a month or two, you could be hit with a surprisingly big bill. However, not if you regularly compare gas and electricity prices to get a good deal.
With a credit meter, you can also opt for an Economy 7 or Economy 10 meter which offers cheaper rates for either seven or 10 hours through the night. This allows you to run dishwashers and other appliances overnight at a much cheaper rate than normal. The downside is the day rate is relatively pricey.
It’s definitely worth having a think about which set up would work best for your lifestyle if you’re looking to compare electricity prices or gas deals and make a switch.
So how easy is it to change from prepayment to a credit meter?
If you do move into a property that has a prepayment meter, don’t worry, it can be replaced by a credit meter if you’d prefer.
Firstly, you need to make sure you don’t have any debt attached to your prepayment meter. Then, you need to compare utilities, switch to a credit meter supplier and get a credit meter installed.
Changing utility supplier takes around 17 days, but it may take longer to physically install a new meter. Installation can take a while and there may also be fees to pay to cover the cost of this.
It’s also worth bearing in mind that each of the big six energy companies has slightly different rules and schedules for the replacement of prepayment meters. It’s worth looking into specific companies to compare utilities and then make a switch.
But don’t let that put you off. Switching to a credit meter means you can access some of the cheapest gas and electric suppliers and cheap energy deals, so it may be worth the wait!