Requiring a Credit Card for a Free Trial | Which Test Won

The results:

Variation A will have the most sign-ups, but the reason for long-term revenue may not be so straightforward.

Sites where you have to enter your credit card have 80% less signups than those without the credit card. But the trial-to-paid subscription rate is 50% compared to 15% for no credit card required.

However, sites where you enter your credit card also have a higher churn. This can also cause bad branding, i.e., the client forgets they entered their credit card, received a charge, and then gets pissed at themselves and the brand.

In the end, three to six months out, a SaaS with no credit card required typically has a conversion rate of twice that of a credit card required.

The theory behind this reasoning is that you get more customers trying your service with a free trial, no credit card required. Because customers are making the decision to pay because they like your service, they will last longer compared to customers who are forced to enter a credit card to try it out.