What Should a Credit Cost?

Credit-based pricing for AI products should treat credits as a stable customer-facing unit of value rather than a direct reflection of fluctuating provider costs, allowing companies to preserve balances and plans as models and API pricing change. Effective pricing depends on calculating four variables: cost per credit, customer price per credit, fixed platform fee, and included credit allowance, which together determine revenue, costs, and margins at different usage levels. While fixed fees can produce high margins for low-use customers, such customers may be less likely to renew, and allowances exceeding their break-even consumption level can create losses before overage charges begin. Credit rates should account for cost differences across model tiers, input and output tokens, caching, context length, and priority levels, while teams should periodically reassess margins as provider pricing changes. The approach also recommends stable published credit definitions, usage ceilings and alerts, budget-owner notifications, per-customer margin reporting, and clear organizational ownership of pricing decisions.

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