What is the purpose of prorations in Stripe subscriptions?

• A. Adjust the charge when a customer changes subscription mid-cycle
• B. The ability to issue refunds for mid-cycle changes
• C. Extending the current billing period automatically
• D. Transferring a subscription to another customer

Answer: (A)

Prorations exist to adjust billing when a subscription changes partway through a billing period. If a customer upgrades or downgrades in the middle of a cycle, Stripe calculates the portion of the current period that was owed under the old plan and the portion under the new plan, then applies a prorated amount to the next invoice. This means the customer pays only for the time they actually use under the new plan (or gets a credit for the unused time on the old plan), rather than charging the full new amount for the entire period or needing a separate refund action. In short, prorations ensure fair, usage-aligned charges when changes happen mid-cycle.