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“Credit Card Required”: Why Do Some Free Trial Offers Require Users to Enter-In Their Credit Card Information?

Picture the following scenario: you find an interesting website or service that offers a free trial.
Sounds great – right?

You try to sign up, choose a username, password, and even enter-in your email address during a typical registration process.
But then…. Boom! You’re being asked for your payment information.

But wait a minute… why?
If the trial period is totally free of any charge, as the company claims, why would you need to provide your credit card details? Is it some kind of a clever way to trap suckers? A scam?

Companies do so for several reasons.
Let’s try to explore some of the most common explanations (or excuses) online vendors give for using this strategy alongside some of the real purposes of this model.

The following list details some reasons companies typically give for requiring credit or debit card info before starting a free trial:

  • “To activate your free trial.”
  • To authenticate your account.”
  • “To prevent service abuse.”
  • “To help limit free trials to one per person.”
  • “To avoid any interruption of service once the trial period has expired.”
  • “To verify your identity.”
  • “To make sure that you are at least 18 years of age”.
  • “To protect the company from theft and fraud.”
  • To reduce spam registrations.”
  • “To ensure that account holders are real people.”

Sounds convincing? Perhaps to some. Others may differ.
As you can see, merchants use a variety of arguments to justify this move.
Here are some of the real reasons many companies use this approach.

They Want to Discourage Free Loaders

Companies wish to keep “professional” freebie hunters away from their services.
These people have no intention to purchase anything, no matter how the trial period went.
The company sees them as people who consume vital resources with no real chance of converting them into actual customers.
Asking for billing information is a tactic they use to scare away this type of audience from their services.

They Want Users with Serious Intentions

Willingness to enter-in billing information is an act that demonstrates seriousness on behalf of the trailer and results in improved lead quality.
Marketing industry statistics show that asking for credit card details upfront helps to convert trial users into paid ones.

They Want to Use Auto-Billing

Many service providers count on the automatic billing mechanism for several reasons.
When someone signs up for a free trial with no credit card information submission requirement, he can simply let the free trial expire and never get charged.

Conversely, when payment information is required, the user has to actively contact the company’s customer service to cancel the trial, allowing the vendor to communicate directly with the trailer, extend the trial, offer perks and get into a one-on-one dialogue that may cause a sale.

Besides, as soon as the free evaluation period ends, customers that forget to cancel their trial membership are being automatically billed, and these ‘accidents’ are another source of revenue for the companies who use this method.

Should You Provide Your Credit Card Details at Sign-Up?

It’s totally up to you.
As you can see, service providers have a variety of reasons to ask for your credit card number at the time of your initial enrollment and this practice is used by many A-list internet brands.

If the company is completely legitimate, the trial terms are displayed transparently, and users get clear and easy ways to cancel the trial in case they are not interested in continuing as paying customers – then it’s a perfectly reasonable way to test a given service.

However, remember: in case you’re not interested in becoming a paid customer, the onus is on you to cancel or opt-out before the trial period is up.
As you start your trial, don’t forget to mark your calendar and set up a reminder for canceling it before automatic payment kicks in.