Why “Monthly SMS Credits” Aren’t Always What They Seem

We recently went through Mailchimp’s SMS sign-up flow (it’s owned by Intuit these days) and hit a screen worth flagging for anyone doing digital and SMS marketing: a recommended 1,000 SMS credits for A$28.16 a month, with higher tiers running all the way up to 20,000 credits for around A$197.

It’s presented as a simple subscription choice, pick your tier, add your card, done.

But the detail that matters is easy to miss on that screen: these are recurring monthly subscription credits, and unused credits don’t roll over. If you select 1,000 credits and only send 200 messages that month, the other 800 simply disappear, and you’re billed the same amount again next month regardless.

How Mailchimp’s SMS Credits Actually Work

Mailchimp bundles SMS in as a paid add-on to its email marketing plans, and the credits work on a subscription model:

• You choose a monthly credit tier (1,000, 2,500, 3,750, and so on, up to 20,000+)
• The subscription auto-renews every month at that tier
• Unused credits expire at the end of the billing cycle and do not carry over
• If you go over your tier, you’ll need to either upgrade or top up, depending on the plan

For a business with steady, predictable SMS volume every single month, this can work out fine. But for a lot of small businesses, SMS volume is naturally lumpy, quiet some months, busy around promotions or seasonal periods, and a fixed monthly subscription doesn’t flex with that.

How TextMagic’s Model Compares

TextMagic (which we use ourselves for SMS) takes a genuinely different approach with its Essential plan:

• No monthly subscription fee for the core pay-as-you-go plan
• You buy a block of credit upfront, and it’s spent only as you actually send messages
• Credit never expires on the pay-as-you-go plan, if you buy it and don’t use it, it’s still there next month, and the month after that
• Auto top-up can be switched on so your account tops itself up automatically when your balance gets low, meaning you never accidentally run out mid-campaign, but you’re also never paying in advance for a fixed monthly allocation you might not use
• Standard US/AU SMS pricing sits around $0.049 per message, with the rate dropping at higher volumes

The practical difference is simple: Mailchimp’s model assumes you’ll use roughly the same amount every month and charges you whether you do or not. TextMagic’s model assumes your usage will vary and only charges for what you actually send.

Which One Is Actually Right for Your Business?

Neither model is automatically the “correct” one, it depends on how consistent your SMS sending actually is:

• Choose a fixed monthly credit model (like Mailchimp) if your SMS volume is genuinely steady month to month, and you’re already paying for Mailchimp’s email tools anyway, so the SMS add-on is just extending a platform you’re using regardless
• Choose a pay-as-you-go model (like TextMagic) if your SMS sending varies a lot, if you’re just getting started and don’t yet know your real volume, or if you simply don’t want unused credit disappearing every 30 days

For most small businesses starting out with SMS marketing, particularly the “I’m just getting started” option we saw sitting right there in Mailchimp’s own sign-up flow, a pay-as-you-go model is usually the safer starting point. You can always move to a subscription-based volume plan later once you actually know your real monthly numbers, rather than guessing upfront and paying for credits you never use.

Learn to Set This Up Properly

If you’re building out email and SMS marketing for your business and want to understand platforms like Mailchimp properly, including exactly where add-ons like SMS credits fit in and how to avoid overpaying for capacity you don’t need, our Email Marketing Communications Training Course using MailChimp walks through campaigns, automations and reporting in detail, with one-on-one support included to help you set it up correctly for your own business from day one.

Pricing and credit terms for both platforms are current at time of writing and may change, always check the provider’s own pricing page before subscribing.