What gets used first — my allowance or my prepaid balance?

Rolled-over allowance drains first, then this month's allowance, and your prepaid balance only if you've opted into overflow.

In order: any rolled-over allowance first (it’s the oldest and expires soonest), then this month’s allowance, and only then — if you’ve turned on pay-as-you-go overflow — your prepaid balance. Your balance is never touched unless you opt in.