Is it worth switching to a credit meter from a prepayment meter?

In case you are on a prepayment meter, you are enjoying the benefit of a price limit levied by the energy regulator, Ofgem, last year. This is valued to be £80 for both gas and electricity meters every year, with regional variations. The limit will be revised in October and then in April, every year. However, the existing prepayment meters will phase out as every home will have a Smart Meter installed within next 2 years.

What is a prepayment meter?

This is kind of a household energy meter which is based on ‘pay-as-you-go’ tariff and customers are required to pay for the gas and electricity consumption in advance. On the other hand, a credit meter requires you to pay for the energy you consumed in the previous month or quarter.

You may generally pay for the energy by adding money to a special key fob or smart card which is then inserted into the meter.

Prepayment meters are mostly utilized by such families that either have a low income or do not pass the credit check required to pay for gas and electricity on a monthly or quarterly basis.

Consumer who have amount overdue on a credit meter can be shifted to a prepayment meter until they settle the arrears.

Benefits of moving to a credit meter?

It is likely to move from the prepayment meter in case you find a more competitive tariff. However, the fact is that the most competitive tariffs and best deals are available to those consumer who have a credit meter and who pay for their gas and electric bills on a monthly or quarterly basis mostly through direct debit.

The good news is that if you are on a prepayment meter, you can make the switch to a credit meter, which means you can avail low-priced tariff and can make instant savings on your energy expense.

In case you are in debt with your existing supplier, you can still move if your debt is under £500 and you have made arrangements to pay off the debt.

Now you all you need to know is to what it take to make the switch.

Know how to move to a credit meter from a prepayment meter

The first thing you need to do is to contact your supplier to check your eligibility for a credit meter. They will most probably run a credit check on you and the result of the credit check will help them decide if they think you are capable enough make the repayments.

In case you qualify for the credit meter, an engineer will visit you to replace your existing meter with the new one. This may take a few days or a few weeks, depending on the energy supplier you have.

While you may be required to pay a fee as installation charges, it will be eventually compensated by the saving you will be able to make by selecting a low-priced tariff.