Why do free trials require a credit card?

It's always helpful to try it before you buy it when it comes to a new product or service you're unsure about. Savvy companies know that offering consumers a free trial can be one of the best ways to turn you into a long-term customer. But the initial excitement of gaining access can abruptly end when you're prompted to enter your credit card number. If it's truly a free trial, then why do they ask for that?

In this article we'll break down the following questions:

• Why do companies require a credit card for a free trial?
• Can you get a free trial without a credit card?
• Are there any benefits to using a credit card for a free trial subscription?

Why are credit cards required for free trials?

It may feel like a nuisance to hand over your credit card details before you even know if you want to purchase or subscribe to the service longterm. While it's fair to be cautious, you may not realize there are multiple reasons why a company would require your credit card (or debit card).

To win new customers

Companies would love for you to become a paying customer. Free trials are considered a customer retention strategy. They're hoping that you'll decide to continue with their service after the free trial is over. When your card number is already attached to your account, there is no disruption of service, and the payment is seamless.

If the service automatically enrolls you in a paid subscription at the end of the free trial, you'll want to know that up front and understand how to cancel before that enrollment begins if you don't wish to continue.

To attract the right customer

Every brand wants to meet the needs of their customers. Free trials offer a way for both the company and the consumer to find out if they're a good match. It's a way of weeding out the people who don't plan to commit long term, and at the same time, attract customers who plan to stick around. Those who choose to fill in their credit card number may have a more serious intention to engage with a company's product or service.

To expand customer knowledge of your services

The people who experience a company's product for free may offer higher exposure and word-of-mouth promotion. Everyone loves free stuff. If someone enjoys that free stuff, they are more likely to tell others. The more people who know about the product, the more sales they can expect.

Can you get a free trial without a credit card?

If you're not so sure you want to use your credit card to gain access to a free trial, it may be possible to use a debit card or a prepaid card instead. Prepaid debit cards are not connected to your bank account like traditional debit cards. Keep in mind your service will likely be turned off once the prepaid card is no longer covering the charges.

If you ultimately decide to continue with the subscription, you can add your regular credit card to the account.

Are there any benefits to using a credit card for a free trial?

If you find you have been misled about the payment policy, you may be able to dispute the charges. Before signing up for any free trial, be sure to read their terms and conditions to see what their policy is for refunding or disputing an unwanted charge.

In conclusion

In the US, we can have several subscription services at any given time. While you may feel unsure about entering your credit card information for a free trial, we hope this article helps you feel more informed about why companies ask for them. If you need additional insight, take a look at this advice from the Federal Trade Commission.