This article was produced in partnership with HSBC Canada. Together we thrive.
One of the first things you need when you arrive in Canada is a cell phone (or, for all you European readers, a mobile!).
In the era of Google Maps, Amazon, Uber, and all the other millions of services you can get at the touch of a button, smartphones have become an integral part of our daily lives. Think about it: How many times have you picked up your phone since you woke up this morning?

More and more people in Canada are using their smartphones to pay for everyday purchases. With HSBC Canada, you can integrate your banking with your mobile devices.
When it comes to devices that we spend so much time with every day, you want to be sure you’re ready to select the best option you can get in Canada.
In fact, you can even research your options before you arrive.
In this article, we review one of the major questions you’ll have to answer when choosing a Canadian phone plan: do you want a prepaid plan or a monthly contract? We’re going to explain the difference between the two and help you understand which one is a better fit for your needs.
Once you understand the difference between prepaid and contract plans, be sure to check out our guide comparing Canada’s major phone providers.
The basics: What are prepaid and contract phone plans?
First, let’s go over the terminology, in case it’s different from your home country/country of origin:
- Prepaid plan (also called “pay-as-you-go”): This is a type of cell phone plan where you pay for your services in advance. You purchase a finite number of calling minutes, texts, and data and if you use it all up, you will no longer be able to use those services, unless you pay more to refill your account.
- Monthly contract plan (also called “postpaid”): This is a type of cell phone plan where you pay for your services after you use them, traditionally on a set day every month. A major difference is that monthly plans usually won’t cut you off if you exceed your quota for calls, texts, or data. Instead, your phone provider will just charge you for the overage, adding the cost onto your next monthly bill.
Overage charges on monthly plans can be expensive, especially for data. Many Canadian phone providers will charge you an overage fee of $10 per 100 MB of data you use after exceeding your monthly limit, so exert caution. If you’re one of those people who will, with reckless abandon, stream Beyonce’s new music video on your phone regardless of your data limit… watch out! (Though, we totally get it.)
There are a few advantages and disadvantages to both.

Checking out your favourite band and you want to live stream the show? You might want to check your data limit before you stream!
Many providers also offer loyalty benefits and extras to customers who sign up for a phone contract. For example, Fido offers a rewards program for customers, giving them perks like extra data and weekly deals with other companies.
For simplicity and ease, many phone customers opt to use automated payments for their mobile phone bills, or to pay using online banking. To do this, you’ll need a bank account with a bank you can trust. HSBC Canada offers their Newcomers Program which is specifically designed with newcomers in mind. Check out the HSBC Newcomers Program to learn about how you could earn up to $700* by signing up!