The mobile network, owned by Hutchison Whampoa, is expected to roll out the service next month, backed by a multimillion-pound ad campaign through WCRS.
At the heart of the relaunch, the free-credit offer will see customers receive money back every time they receive a call, regardless of whether it is from a landline or mobile. Their handset will be topped up as long as they buy credit.
The operator is also considering whether to drop the ThreePay name as part of the revamp.
3 UK currently has 3.2m customers, according to figures it posted in August. Of these, 53% use post-pay and 47% pre-pay. The company is keen to increase the number of pre-pay customers and views the Christmas period as the ideal time.
The relaunch and overhaul comes as 3 faces increasing competition from rivals Vodafone and Orange.
Over the past few months, Vodafone has tried to match 3's 3G charges. Last week, meanwhile, Orange said it would be launching 3G pre-pay in time for Christmas, which is likely to be backed by a heavyweight advertising campaign.
3 declined to comment on its plans and a spokesman said it would not respond to 'market rumour or speculation'. However, insiders confirmed a pre-pay revamp was planned ahead of Christmas.