Pricing can shape behaviour, drive revenue, and ensure that your business scales sustainably. Credits pricing provides a flexible alternative for companies with variable costs, fluctuating usage, or high-value actions that don’t fit neatly into a subscription model.

Instead of per-use charges or flat monthly fees that lock customers in, credits give them a prepaid balance to spend as they wish. This approach is common in application programming interface (API)-driven businesses, software-as-a-service (SaaS) platforms, and professional services – anywhere companies need a balance between predictable revenue and customer flexibility.

But credits pricing isn’t always easy to get right. If it’s too complex, customers might hesitate. And if the pricing structure isn’t carefully designed, revenue can become unpredictable. Credits should give users freedom while keeping business growth steady and scalable.

Below, we’ll explain how credits pricing works, when to use it, and how to implement it effectively, so you can build a pricing model that supports your customers and your bottom line.

What’s in this article?

• What is credits pricing and how does it work?
  
• Why do businesses choose a credits pricing model?
  
• How does credits pricing compare to traditional subscription pricing?
  
• What are the main challenges of implementing a credits pricing model?
  

What is credits pricing and how does it work?

Credits pricing is when customers buy or receive a set number of credits to spend on a product or service. Instead of paying for every single use, they tap into their credits balance.

Credits act as a currency inside a product or platform. Customers use them to pay for access, usage, or features. Not all actions cost the same, and some services or features might use credits faster than others. Companies can structure credits to encourage certain behaviours – for example by providing more value at higher purchase tiers or setting expiry dates to drive engagement. For customers, buying credits up front can simplify billing and help budget for usage.

Businesses use this model to make pricing more flexible, let customers scale usage without constant transactions, and when appropriate, nudge customers towards higher commitment levels. This model is a popular choice with the following types of businesses:

• Software-as-a-service (SaaS) businesses: Many SaaS companies use credits for usage-based features, such as running AI-powered functions or accessing premium tools. For example, OpenAI’s application programming interface (API) uses “tokens” to track how much text you generate, and its pricing models charge for a set number of tokens.

• APIs and developer services: Many API-driven businesses charge based on credits instead of raw usage, which makes it easier for developers to predict costs and scale. For example, Google Maps API consumes credits for every map load or request.

• Professional services and marketplaces: Some platforms use credits as a way to manage access to services and make it easier to standardise pricing across different offerings. For example, Upwork gives freelancers virtual tokens called “Connects” to apply for jobs, which can be bought in bundles or received monthly.

• Gaming and digital content: Games and content platforms use credits to let users buy in-game items, digital goods, or premium features. For example, Xbox sells credits that players can spend in specific games for customisations and boosts.

Why do businesses choose a credits pricing model?

The credits model is a strategic way to balance flexibility, customer commitment, and revenue predictability. Credits pricing gives businesses control over how they price and package their services, makes it easier for customers to understand and manage spending, and opens up creative pricing strategies such as bundling, promotions, or volume discounts.

Here are some of the main reasons why businesses might choose a credits pricing model.

Flexibility and predictability

Credits create a middle ground between rigid subscriptions and unpredictable pay-as-you-go models. Customers can buy a set amount of credits up front and use them as needed rather than committing to a fixed plan or dealing with many individual microtransactions. Businesses might see steadier revenue and fewer one-off purchases.

Larger up-front purchases

When customers buy credits in bulk, they’re committing to future usage. That reduces churn because they’ve already invested in the platform. It also creates more liquidity, since revenue comes in ahead of service delivery. And businesses can sweeten the deal with volume discounts: the more credits customers buy, the better the per-unit rate.

Clear value attached to costs

With credits, customers spend only when they’re actively getting value. This is effective for businesses that sell usage-based services (such as APIs) or companies that want to charge more dynamically (e.g. higher credits costs for premium features). It also makes it easier to charge for high-value actions rather than just access.

Customer engagement

Unused credits create an incentive to keep using a product. When customers have a credits balance, they’re more likely to continue working with the business rather than letting their investment go to waste. If credits expire, businesses can nudge customers towards consistent usage, renewals, or top-ups, before they run out.

Standardised global pricing and promotions

Credits reduce currency differences, tax complications, and pricing adjustments across markets. Instead of managing localised pricing for every country, businesses can set a single credits system and adjust credits pricing as needed. This also makes promotions easier, and offering bonus credits instead of direct discounts can encourage spending while maintaining perceived value.

Compatibility with tiered or dynamic consumption models

Many businesses want to offer different levels of service without forcing customers into rigid plans. Credits make it easier to charge more for premium features, off-peak versus peak usage, or resource-heavy actions – all without constantly adjusting base pricing.

How does credits pricing compare to traditional subscription pricing?

Both credits pricing and subscription pricing models lock in revenue, but they shape customer behaviour differently. Here’s how they compare.

Credits pricing

• Flexibility vs. predictability: Credits let customers buy what they need and use it on their own schedule. This gives users more flexibility, but businesses trade some predictability since revenue depends on how often customers top up.

• Customer commitment: Credits encourage prepayment, but they don’t force an ongoing relationship. This can lower the barrier to entry, but it also means customers might drift away once they’ve spent their credits. Expiring credits or loyalty incentives can help prevent that.

• Connection to usage: Credits work when usage varies. They let businesses charge for high-value actions instead of general access, which makes them a better fit for usage-based services such as API calls or premium features.

• Customer experience: Credits require more of a thought process. Customers have to manage their balances and understand how much different actions cost. If the system is too complicated, it can create problems.

• Best use cases: Offer credits when customers’ usage fluctuates, actions have different values, or you want customers to prepay without locking them into a contract (e.g. OpenAI, Upwork).

Subscription pricing

• Flexibility vs. predictability: Subscriptions charge a flat fee at regular intervals, so customers pay whether they use the service or not. This can be beneficial for businesses because revenue is steady, but it can frustrate customers if they don’t use the product enough to justify the cost.

• Customer commitment: Subscriptions force commitment. If customers want to keep access, they have to keep paying. This model works well for products with consistent, ongoing value.

• Connection to usage: Subscriptions work best when the value is continuous, such as with software that people log into daily or content they keep consuming. The price is tied to access, not necessarily usage.

• Customer experience: Subscriptions are simple – one price, full access (or tiered access). Customers always know what they’re paying.

• Best use cases: Use subscriptions when customers use the product regularly and expect ongoing access (e.g. Netflix, Shopify).

What are the main challenges of implementing a credits pricing model?

Credits pricing can be powerful, but it’s not always the best solution. Here’s where businesses might run into trouble.

Customers don’t always understand how it works

If customers don’t immediately understand how many credits they need or what they’re worth, they might hesitate, which can hurt conversions. The challenge is to make credits pricing feel just as intuitive as an amount of money, without making people do mental maths.

Pricing can get complicated

If everything in your product has a different credits cost, you’re creating a cognitive load for customers. You don’t want them to need to constantly check balances when they could be using your product instead. Finding the right balance, where credits offer flexibility without adding friction, can be difficult.

You need expiry and refund policies

You’ll need to determine whether credits expire, and if they do, how long they last. If credits last forever, you carry an ongoing liability on your books. But if customers lose money with expired credits, that can make some of them leave for good. Consider how you’ll manage refunds, rollovers, or incentives to keep customers involved with your product.

It’s harder to predict revenue

Subscriptions give businesses a reliable revenue stream. With credits, purchases are more sporadic. Some months might be strong and others light, which makes forecasting trickier. You can manage this by bundling credits into recurring plans or offering auto-refills, but it’s not as predictable as a pure subscription model.

Customers might find loopholes

If your credits pricing isn’t well structured, savvy users will find ways to stretch their credits further than you intended. For example, if bulk credits purchases come with big discounts, but they never expire, customers might buy once and coast for years, which cuts into long-term revenue.

You need a strong usage tracking system

Unlike subscriptions, which charge once per cycle, a credits system requires constant tracking. You need to know how many credits each action costs, what the balance is, and how it adjusts in real time. If this tracking isn’t reliable, customers can quickly become frustrated.

There’s a risk of pricing shock

If customers burn through their credits faster than expected, they might feel like they’re being cheated, even if the pricing is fair. A good credits pricing model needs to balance transparency with perceived value.