Many AI companies and cloud providers give startups free credits, a free year of a paid plan or a pot of usage tokens to get going. For a founder watching every pound, AI credits can feel like free money. They are a real help, but only if you use them wisely, because credits run out and the bills that follow can be a shock.
In this article
This guide covers how tokens work, how to make credits last and what to plan for when they end.
What a token is
AI language models do not read words the way you do. They split text into small pieces called tokens. A token might be a whole short word, part of a longer word or a punctuation mark. As a rough guide, a page of text is several hundred tokens, though the exact count varies by model and language.
You pay for tokens going in, which is your prompt, and tokens coming out, which is the reply. Output usually costs more than input. Our explainer on why AI gets simple letter counting wrong shows why splitting text this way has odd side effects. A good background read is the article on large language models.
How AI credits are usually given
AI credits come in a few forms. Some are a dollar-value balance that is spent as you use the service. Others are a fixed number of tokens or a free tier with usage limits. Many expire after a set period, often a year or less, so unused AI credits can simply disappear.
Read the terms before you plan around them. Check which models and services the credits cover, whether they apply to every feature, and what happens at the end. Some programmes need approval, and some limit the credits to certain kinds of company.
Making AI credits last
The biggest saving when spending AI credits is choosing the right model for the job. Large models are powerful and expensive, while smaller ones are quicker and far cheaper. A task like sorting emails into categories rarely needs the biggest model, so test a smaller one first.
Other habits help too:
- Keep prompts short and remove text the model does not need.
- Limit the length of replies where a short answer will do.
- Cache repeated answers instead of paying for the same question twice.
- Test with small samples before running a large batch.
- Set spending alerts and hard limits in your account.
Watch for loops, too. A buggy script that calls a model repeatedly can burn through a month of AI credits in an afternoon. Always put a cap on retries, log every request, and ask a colleague to review any code that loops over a model call. A few minutes of checking is cheaper than a surprise invoice and keep an eye on usage in the first few days after any change.
Keep a simple record of where credits come from. If you hold offers from two or three providers, note the expiry date of each and use the soonest-expiring AI credits first. A spreadsheet is enough, and it stops a valuable balance lapsing unnoticed.
The cliff when the AI credits end
This is where many young companies get caught. A product that cost nothing to run on credits suddenly has a real monthly bill. If your pricing never included that cost, margins can vanish overnight.
Plan for the end from day one, ideally before you spend the first token. Work out the cost of serving one typical customer in tokens, then check that what you charge covers it with room to spare. Treat them as a way to learn and test, not as a permanent part of your finances. The pressures that follow are part of the story in our article on why AI startups shut down even after raising millions.
It also helps to avoid depending on a single provider. If your code is tied tightly to one company’s service, moving away when credits end is painful. A thin layer that lets you swap models gives you bargaining power and a way out.
Be careful with automatic upgrades as well. Some accounts move to a paid plan on their own when the free allowance ends, charging a card that was added at sign-up. Set a calendar reminder two weeks before expiry, and check whether you must cancel to avoid charges.
Using AI credits to learn what really matters
The best use of free credits is learning. Build a small version of your product, put it in front of real users and find out which features they value. Free AI credits let you try ideas that would otherwise be too costly, so be bold in testing and careful in scaling.
Record what your AI credits pay for in each feature. After a month you will see which ones eat the most tokens, and you can decide whether they justify the cost. If a feature is expensive and rarely used, that is useful news.
Finally, keep notes on cheaper alternatives. Open models you can run yourself may cost less at scale, and a rival provider may offer its own AI credits,.
In short, free AI credits are an opportunity with an expiry date. Spend them on learning, track every token, and know your real costs before the balance reaches zero.
