Prepaid electricity plans may be a good option to get your power up and running quickly if you have a history of bad credit. And they can help to keep tabs on your household’s ongoing electricity usage and costs. Paying for your power upfront also eliminates bill shock. However before going down the prepay path, there are a few factors that you should keep in mind.
Of course, beyond credit issues, there are different reasons why you might opt for a prepay plan. It may be simply a matter of preferring to manage your budget more closely and pay for your power as you go, rather than tackling the costs all in one hit at the end of each billing period.
Here at Canstar Blue, we’ve put together a guide that takes a look at what to consider when signing up for a prepaid electricity plan. Plus some of the prepay options currently available (including plans with no credit checks), along with how to check your credit record.
Prepaid Electricity: Factors to keep in mind
As a starting point, it’s important to note that if you’re keen on prepay power, you will need a smart meter, which records usage across 30-minute intervals. Although most NZ homes already have smart meters, you’ll need to check you’re good to go with your chosen power company.
Meanwhile, if you believe your credit history could be an issue, it’s worthwhile confirming whether a provider conducts credit checks prior to signing up a new customer. More on bad credit below.
Other factors to keep in mind include:
- Medically dependent and vulnerable customers. If you or a family member fall into this category, prepay is not a recommended option. It’s important to make your provider aware of your needs, and to discuss the best plan options.
- Disconnection. In the event of disconnection, what process does the provider follow? What steps need to be taken to reconnect, and what fees apply?
- Topping up. Providers may require minimum top-up amounts. And certain payment methods may attract fees, so it’s worthwhile confirming the costs involved.
- Payment methods. What range of payment methods are available: from online to in-store options?
In addition, it’s vital to keep track of your power usage when on prepay. For this reason, you should also consider the account monitoring and management tools on offer from providers, from websites and apps, to email and text notifications. Note that text messages can incur additional costs.
Prepaid Electricity Providers
The following are some of the electricity retailers currently offering prepay power plans. Of course, you’ll need to confirm that individual retailers are offering plans in your area. Further information can be found on retailers’ websites.
And as always, it’s worthwhile shopping around. Always compare a range of deals and providers when determining what’s best for your household.
Globug says that it’s easy for consumers to join its prepay service. No bonds or credit checks are required.
Customers can top up from $10 via the Globug website or app using a debit/credit card or internet banking. Or you can pay in-store at dairies and convenience stores around the country. A fee of 20c per top-up applies for internet banking, 40c for debit/credit cards, and 75c in-store.
The Globug app allows customers to see their current balance, along with an estimate of how many days of power they have remaining. Plus information on how much they’re spending by the day, week and month. Text and email notifications are also available.
If you’re thinking of joining Globug, information on pricing, along with a bill calculator, is available at the Globug website.
Wise says that no credit checks or deposits are required for customers signing up for its prepay service.
Customers can top up from $10 via Wise’s website and app, using a debit/credit card or internet banking. Internet banking is free. But a fee of 40c applies for debit/credit card transactions, or 75c for in-store top-ups at participating merchants.
In addition, Wise offers a range of online tools. Customers are able to check their usage and balance from any device via the Wise website and app. Text and voicemail notifications also available.
If you’re keen on checking out what Wise has to offer, information on its pricing, along with a bill comparison calculator, can be found at its website.
Contact Energy’s Contact PrePay service is available for residential customers on electricity supply only. Customers need to have a mobile phone to receive text alerts and be set up for email correspondence. New accounts require a satisfactory credit check.
Contact’s prepay rates are the same as their normal plan rates. Customers can top up any amount via Contact’s website and app, or by text, using a credit/debit card, or internet or telephone banking. Fees apply to all payments made by credit or debit card.
Customers can keep track of how much power they’re using, and view their balance and estimated days remaining, via Contact’s website and app. Contact also notifies customers by text when their balance is low and a top-up is needed.
Further information on Contact PrePay, along with Contact’s electricity rates, is available via the Contact website.
Powershop doesn’t fit the traditional prepay mould. All its plans come with postpaid billing as standard and require a credit check. However, it also provides a service that allows for customers to purchase power ahead of its use.
Customers have the option of paying when they receive their bill or paying in advance by purchasing Powerpacks. These are available in different dollar amounts – big and small and for different types of usage and budgets – from Powershop’s online shop.
Powershop also provides a range of tools via its website and app. These allow customers to keep track of their costs and usage, and are designed to deliver insights into how much power is being used and when.
If you’re keen to find out more about Powershop, further information on its Powerpacks and rates can be found at its website.
How to check for bad credit
If you’re concerned your credit rating could prevent you from opening a power account, it can help to check your rating before making an application. Your credit record includes all of the times you’ve been given credit by a bank or company and whether you paid it off on time. It’s worth noting that:
- Repayment history information can be kept on your record for up to two years.
- Unpaid debt, where the lender tried to recover the money owed, can appear for up to five years, even if you’ve paid off the debt in full.
It’s free to get a copy of your credit record, from: Centrix, illion and Equifax.
If you do have a bad credit rating, don’t despair. It is possible to improve your credit record over time. So it’s always worthwhile being proactive with your credit and payment obligations.
→ Related article: How Long Does It Take to Fix a Poor Credit Score?
Top tips for using prepaid power
Know your fees
Each prepaid retailer has a different fee structure and you could end up paying a lot of extras if you are not aware of them. Each company must tell you their fees and charges (most list them online). Once you know the fees, do your very best to avoid the high ones, such as not topping-up in-store, or not running out of prepaid power if there are reconnection fees.
Get active with monitoring your power use
If you’re going to use prepaid power, you can’t just forget about your power use until the bill comes. You need to monitor your energy consumption, and top up before your power gets too low. Online stores or the retailer’s app are usually the best ways of doing this. Topping up on a regular basis, such each pay day, will ensure you don’t run out of power.
Have a contingency if you run out of money
It’s almost inevitable that, at some stage, you’ll run out of prepaid power. Some retailers provide emergency top-ups, but there are usually charges or strict conditions attached. On the other hand, Powershop simply bills you for any power used that is not prepaid.
If you are switched off, do you know how to get reconnected? Some companies only reconnect at certain times, so it’s best to find out what these times are before you are left without power. It’s also a good idea to have your power company’s contact details written down somewhere, in case you are disconnected and you can’t use Google.
Finding the best power provider
The fact that you’re reading this means that you’re already on the right track to finding a great deal on power. But when comparing power companies, it’s important to consider the broader picture – don’t become too focused on finding a deal with a big prompt payment discount or special perk. Be sure to balance all the rates, discounts, fees and contract periods when making a decision, as well as more personal factors, such as customer service and support.
To help you find the best value electricity retailer, Canstar Blue rates NZ power companies for customer satisfaction and value for money, see the table below for some of the results, or you can click on the button below for the full results of our survey.
Canstar Blue’s latest review of NZ power companies compares them on customer satisfaction. The table below is an abridged version of our full results, available here.
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Canstar Blue NZ Research finalised in April 2022, published in June 2022.
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