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While you have a valid argument for why a customer would prefer the alerts...

It should be the choice of the customer.

Imposing one option: only hard budget cap or only alerts is the wrong design decision.

Really it depends on the average loss for the service provider by customers that can't pay. If overages don't get paid by customers than all service providers will move to hard caps to prevent loss. If all providers do it, customers won't have much of a choice, except for higher caps with credit checks first.

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