This question recently came up at the Freemium Summit on a pricing panel where I spoke; if you are offering a trial or a freemium service, when should you ask your users for a credit card number?

Asking for a credit card number is a significant hurdle for most people. High fall off rates are to be expected. But once someone gives you a card number and starts a trial, they are more likely to convert to a paid subscriber at the end of the trial. So, if you are optimizing for your conversion numbers from trial to paid, then collect the credit card at the beginning of the trial.

If you offer a trial period and require your users to upgrade before the end of the trial, you will get more people in the door and trying your service. However, it’s very difficult to get someone to come back before the end of the trial to enter their card number. At least the number of total users will be much higher; use this as an opportunity to collect more feedback from your free users, especially the ones that declined to upgrade.

If you are able to offer your users an indefinite, free version, then you can wait to collect the credit card number when the user is ready to upgrade and convert to a paid subscriber. You benefit from getting the most people in the door and will have the most opportunities to ask the user to consider upgrading.

At the end of the day, you need to factor in the costs associated with the free trial, the viral-ity of your product, and the likeliness of a conversion when deciding when to collect their credit card number. You’ll get the highest retention rate when you can reach the customer the most (while providing value, not annoyance).