Pay-as-you-go plans are flexible payment options that allow users to pay for services as they use them, rather than committing to a long-term contract. This model is commonly found in mobile phone services, where customers can purchase credits or data packages without being tied to a monthly fee. These plans are beneficial for those who want to control their spending or who may not use the service regularly. Users can easily add funds when needed, making it a convenient choice for individuals who prefer not to have recurring charges on their accounts.