Freemium gives a limited product away forever; a free trial gives the full product for a set time, usually 14 days, then asks for payment. Freemium brings more sign-ups but converts fewer of them (typically 3% to 5%). Trials convert more: about 8% across all trials, and around 30% when a card is required (ChartMogul, 2026). Choose freemium for huge, shareable markets and trials for everything else.
Key takeaways
- Freemium wins sign-ups; free trials win paying customers per visitor.
- In a 2026 survey, card-required trials produced about 10.5 payers per 1,000 visitors versus about 5 for freemium.
- Fourteen days is the most common trial length, used by 62% of products surveyed.
- Australia's subscription-trap rules start on 1 July 2027, with trial-reminder details to be set by regulations, so design for them now.
Michael Martin stood at the bottom of an escalator in Grand Central Station, handing business cards to everyone who came past.
His company, RapidSOS, had built an app called Haven. Press a button and it sent your location and details straight to a 911 call handler. Haven offered a six-month free trial, then $2.99 a month.
For two hours he pressed cards into people's hands. He told himself they'd have a million users by the end of the day.
Then he rode the escalator up. About three-quarters of his cards were in the trash can at the top.
People didn't want Haven. Downloading an app for emergencies felt like too much of an ask, and they didn't see why they should pay $2.99 a month for something they got free by dialing 911. Six months free didn't change that. Haven was shut down in 2018, and RapidSOS went on to succeed with a completely different model.
I tell this story because it's the first rule of trials and free tiers: neither one can fix a value problem. They only help people discover value that's already there.
Once you have that, the question becomes which door to open.
What is the difference between freemium and a free trial?
With freemium, you give a limited version away permanently. Spotify's free tier never runs out. You hope some users upgrade, and you may earn from the rest in other ways, such as ads.
With a free trial, you give the full product away for a limited time. When the clock runs out, the customer pays or leaves. Streaming services, software and gyms use them all the time.
| Freemium | Free trial | |
|---|---|---|
| How long it's free | Forever | A set period, usually 7, 14 or 30 days |
| What's free | A limited version | The full (or nearly full) product |
| Sign-ups | More | Fewer |
| Conversion to paid | Lower, typically 3%–5% | Higher: about 8% on average, about 30% with a card (ChartMogul, 2026) |
| Time to purchase | Slow, often months | Fast, often by the trial's end |
| Cost of non-payers | Ongoing: you serve them forever | Limited to the trial period |
| Works best with | Huge, shareable markets | Smaller markets, high-value products |
| Biggest risk | Too many happy free users | Users not reaching value in time |
Which converts better: freemium or a free trial?
The best recent data comes from ChartMogul's SaaS Conversion Report (February 2026), run with Growth Unhinged and ProductLed. It looked at the whole funnel, from website visitor to paying customer.
| Model | Visitors who sign up | Free-to-paid conversion | Paying customers per 1,000 visitors |
|---|---|---|---|
| Free trial, card required | About 3.5% | About 30% | 10.5 |
| Free trial (all) | About 4.5% | About 8% | 3.6 |
| Freemium | About 9% | 'Good' is 3%–5% | 5 |
| Ungated freemium (try before an account) | About 7% | 'Good' is 7%–9% | 5.6 |
Look at the shape. Freemium doubles your sign-ups. But a card-required trial turns visitors into paying customers about twice as efficiently, with no permanent free users to carry.
The same survey found:
- 57% of products offer a free trial, more than twice the 26% offering freemium.
- 14 days is the most common trial length (62% of products), followed by 7 days (14%) and 30 days (14%).
- Only 20% of free-trial products require a card up front.
- Just 7% use a reverse trial.
Should a free trial require a credit card?
Here's the trade-off in plain terms.
Card required (opt-out). Fewer people start, but the ones who do are serious. Conversion is much higher, abuse is lower, and for AI products with real running costs, a card is your best defense against people creating account after account to farm free usage.
No card (opt-in). More people start, including people just curious. Conversion is lower, but you collect more leads, and there's no "I forgot to cancel" resentment.
My view: if your product is expensive to run (AI, human service, physical goods), ask for the card. If it's cheap to run and you want reach, don't.
Australia: free-trial rules are coming (as at October 2026)
The Competition and Consumer Amendment (Unfair Trading Practices) Act 2026 has passed, and its subscription-trap rules are due to start on 1 July 2027. Legal summaries describe requirements including clear pre-contract disclosure, easy online cancellation, and notices at times set by regulations, which are expected to include a reminder before a free trial converts. As at October 2026 those regulations hadn't been made, so check the final rules before you fix your timing. If you run card-required trials in Australia, design your reminder emails and cancellation flow now. Start with our Australian subscription-trap guide, check your flow with the AU Subscription Compliance Checker, and use the free trial reminder templates. This is general information only; get legal advice for your situation.
How long should a free trial be?
As long as it takes a typical customer to hit their first real "aha" moment, plus a little buffer. No longer.
- A design tool that shows value in one session: 7 days.
- Business software that needs data imported and a team invited: 14 days.
- A service with a monthly rhythm (bookkeeping, a meal plan, a membership): 30 days, or one full cycle.
Long trials don't help if people don't use them. Haven's six months certainly didn't. A trial that ends before the customer has done anything meaningful just becomes a reminder that they never got around to it.
Freemium, trial or neither?
Answer a few questions in the free Pricing Model Picker and get a recommendation for your market.
Worked example: run your own funnel
Let's compare the two doors for a product with 20,000 website visitors a month at $49 a month. I'll use the benchmark rates above.
20,000 visitors a month, $49 a month
Card-required trial: 20,000 × 3.5% = 700 trials × 30% = 210 new customers, or $10,290 of new MRR a month.
No-card trial: 20,000 × 4.5% = 900 trials × 6% (the top of ChartMogul's 'good' range for no-card trials) = 54 new customers, $2,646 new MRR.
Freemium: 20,000 × 9% = 1,800 free users × 5.5% ≈ 99 new customers, $4,851 new MRR, plus about 1,700 new free users to serve every month, forever.
Benchmarks from ChartMogul (Feb 2026); your rates will differ.
The card-required trial wins on paying customers. Freemium wins on audience. Which matters more? If those free users share your product, refer friends or watch ads, the audience is worth something. If they just sit there, they're a cost.
Work out what a new customer is worth after costs with the Subscription Price Calculator before you decide how much free you can afford to give.
Freemium or free trial? A simple decision table
In the book I summarized it in a table. Here's the 2026 version, with one new row for AI.
| Choose freemium if… | Choose a free trial if… |
|---|---|
| Your addressable market is enormous | Your market is smaller or niche |
| Your product is naturally shareable | Your product isn't naturally shareable |
| A free version is useful on its own and the paid version is clearly better | Limiting the product would strip out what makes it worth having (a Netflix free tier with no movies) |
| Each free user costs you almost nothing | Each user costs you real money (AI, people, goods) |
And if you're stuck in the middle, you have three in-between options:
- A reverse trial. Start everyone on the paid plan for 14 days, then drop them to free. You get trial-style urgency with a freemium safety net. Full guide: the reverse trial.
- A paid trial. A small first-month price, like ElevenLabs' $1 Starter month or Synthesia's $9 first month. It filters out tire-kickers.
- Freemium plus trials of premium features. HubSpot keeps its free CRM tools and offers 28-day trials of its paid AI agents.
What to do next
Look at your own funnel. How many visitors do you get, what does a customer pay, and what does each free user cost you? Put those into the worked example above and see which door wins.
Then check the decision table. If you land on freemium, read when freemium pays. If you land on a trial, set the length by your "aha" moment and track your free-to-paid conversion every month. And if you sell to Australians, sort out your trial reminders before 1 July 2027.
Frequently asked questions
Is a free trial or freemium better for SaaS?
For most SaaS products, a free trial. In ChartMogul's February 2026 survey, 57% of products offered a free trial against 26% offering freemium, and trials converted visitors to paying customers more efficiently. Freemium makes sense when the product spreads by being shared and the market runs to millions of users.
Can I offer both freemium and a free trial?
Yes. Many companies keep a free plan and offer a time-limited trial of the paid plan on top. HubSpot has free CRM tools and offers 28-day trials of its AI agents. A reverse trial is a tidy version of the same idea: everyone starts on the paid plan, then drops to free if they don't upgrade.
What is a paid trial?
A paid trial charges a small amount for the first period instead of nothing. ElevenLabs' Starter plan is $1 for the first month and Synthesia's Starter is $9 for the first month. A small price filters out people who would never pay, and it reduces abuse of costly AI features, while still feeling low-risk.
Why do free trials ask for a credit card?
Because card-required trials convert far better: about 30% of trial users pay, in the 2026 ChartMogul survey, against roughly 5x less for no-card trials. The card also deters fake accounts. The trade-off is fewer sign-ups, and some people forget to cancel, which creates refund requests and, in Australia, compliance obligations.
What should happen when a free trial ends?
Tell people before it ends, show the full price and the date they'll be charged, and make canceling easy. Then either start the paid plan (card-required) or move them to a free or read-only state (no-card). Never delete their work on day one; a grace period gives late deciders a reason to come back.
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Robert Coorey, MBA
Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.
Sources
- ChartMogul: The SaaS Conversion Report (4 Feb 2026)
- Growth Unhinged: Free-to-paid conversion report (4 Feb 2026)
- Lenny's Newsletter: What is a good free-to-paid conversion rate? (1 Aug 2023)
- Treasury: Government targets hidden fees and subscription traps (9 Feb 2026)
- Brightlaw: Unfair trading practices ban passed by Parliament (20 Aug 2026)
- ElevenLabs pricing (checked 27 Oct 2026)
- Synthesia pricing (checked 27 Oct 2026)
Facts and prices checked 27 October 2026. Spotted something out of date? Tell us.