AdWords uses two different billing methods: Postpay and Prepay and the way you’re charged varies according to the billing method you’ve chosen. Once you’ve chosen a billing mechanism, either Prepay or Postpay, it is not possible to switch between the two within your AdWords account. The system will require you to set up a new Adwords account and and ask you to select a suitable billing option.
Postpay allows you to pay only after you accrue costs for advertising activity. The types of postpay available to you depend on the country of your billing address and your selected currency but generally this is either by credit card or direct debit. The system will deduct a payment of your account each time you reach certain thresholds (£50, £200, £350, £500).
Prepay allows you to pay for your advertising before receiving clicks or impressions. You can add funds to your account, and Google will deduct advertising costs from your balance in accordance to your daily limit specifications. The system will remind you to add more money when your balance is running low, but if you do exhaust your funds, Google will pause your ads until you have a chance to top up your account. The types of prepay available to you depend on the country of your billing address and your selected currency, in most cases this is either by credit card or bank transfer. When you choose Prepay billing, your advertising campaigns will be activated as soon as Google has received your first prepayment, and your ads will not be shown prior to this.