Pre Payment Meters
Essentially, gas, water and electricity companies offer their services on a credit basis. Customers will only pay for the service they have received after using it, and inevitably some customers have trouble paying bills, or prefer to pay for their gas, water and electricity as they use it.
For these customers some companies will insist on the installation of a pre-paid meter, which usually comes with a payment card, or fob, which can be topped-up online or at thousands of retailers across the country.
Customers must top up the fobs, which they then insert into their meter, and it will add credit allowing them to carry on using gas and electricity.
These meters do have their downsides, however. They are more expensive than paying on a quarterly basis (although energy regulator Ofgem are currently challenging how fair this is), and if not monitored can run out at the most inconvenient of times.
Many of the devices allow the user to activate an emergency £5 of credit, which will be enough to get them through until the shops are open again.
These meters have become essential for some of the energy companies to ensure they get payment from customers who were not paying bills on time or at all.
Any customer who has the option of using their electricity on a credit basis but wants to pay before using it would still be better off sticking to a credit account, which they can top up at the beginning of the quarter so their account is always in credit, simply because prepay meters are more expensive.
Customers moving into a house with a pre-pay meter can often request that it is removed, although expect to be quoted extortionate prices for the service (as much as £150 at times). These fees are often waived by new companies looking for your business, so switching provider may be the cheapest way of getting rid of your pre-pay meter.