diff --git a/core/llm/utils/starterCredits.test.ts b/core/llm/utils/starterCredits.test.ts
new file mode 100644
index 00000000000..401ef5de424
--- /dev/null
+++ b/core/llm/utils/starterCredits.test.ts
@@ -0,0 +1,82 @@
+import { describe, expect, it } from "vitest";
+import { CreditStatus } from "../../control-plane/client";
+import { isOutOfStarterCredits } from "./starterCredits";
+
+describe("isOutOfStarterCredits", () => {
+  it("should return true for free trial users who have run out of credits", () => {
+    const creditStatus: CreditStatus = {
+      optedInToFreeTrial: true,
+      hasCredits: false,
+      creditBalance: 0,
+      hasPurchasedCredits: false,
+    };
+
+    expect(isOutOfStarterCredits(true, creditStatus)).toBe(true);
+  });
+
+  it("should return false for paid users who have run out of credits", () => {
+    const creditStatus: CreditStatus = {
+      optedInToFreeTrial: true,
+      hasCredits: false,
+      creditBalance: 0,
+      hasPurchasedCredits: true,
+    };
+
+    expect(isOutOfStarterCredits(true, creditStatus)).toBe(false);
+  });
+
+  it("should return false for free trial users who still have credits", () => {
+    const creditStatus: CreditStatus = {
+      optedInToFreeTrial: true,
+      hasCredits: true,
+      creditBalance: 1000,
+      hasPurchasedCredits: false,
+    };
+
+    expect(isOutOfStarterCredits(true, creditStatus)).toBe(false);
+  });
+
+  it("should return false for paid users who still have credits", () => {
+    const creditStatus: CreditStatus = {
+      optedInToFreeTrial: true,
+      hasCredits: true,
+      creditBalance: 5000,
+      hasPurchasedCredits: true,
+    };
+
+    expect(isOutOfStarterCredits(true, creditStatus)).toBe(false);
+  });
+
+  it("should return false when not using credits-based API key", () => {
+    const creditStatus: CreditStatus = {
+      optedInToFreeTrial: true,
+      hasCredits: false,
+      creditBalance: 0,
+      hasPurchasedCredits: false,
+    };
+
+    expect(isOutOfStarterCredits(false, creditStatus)).toBe(false);
+  });
+
+  it("should return false for users who did not opt into free trial", () => {
+    const creditStatus: CreditStatus = {
+      optedInToFreeTrial: false,
+      hasCredits: false,
+      creditBalance: 0,
+      hasPurchasedCredits: false,
+    };
+
+    expect(isOutOfStarterCredits(true, creditStatus)).toBe(false);
+  });
+
+  it("should return false for paid users who never opted into free trial", () => {
+    const creditStatus: CreditStatus = {
+      optedInToFreeTrial: false,
+      hasCredits: false,
+      creditBalance: 0,
+      hasPurchasedCredits: true,
+    };
+
+    expect(isOutOfStarterCredits(true, creditStatus)).toBe(false);
+  });
+});
diff --git a/core/llm/utils/starterCredits.ts b/core/llm/utils/starterCredits.ts
index 9f0d021d74b..f9aaec0c378 100644
--- a/core/llm/utils/starterCredits.ts
+++ b/core/llm/utils/starterCredits.ts
@@ -1,11 +1,24 @@
 import { CreditStatus } from "../../control-plane/client";
 
+/**
+ * Determines if a user has exhausted their free trial starter credits.
+ * This should ONLY return true for users who:
+ * 1. Are using credits-based API keys (free trial or models add-on)
+ * 2. Have no credits remaining
+ * 3. Have NOT purchased credits (i.e., are still on free trial)
+ * 4. Have opted into the free trial
+ *
+ * Paid users who have exhausted their purchased credits should NOT trigger this.
+ */
 export function isOutOfStarterCredits(
   usingModelsAddOnApiKey: boolean,
   creditStatus: CreditStatus,
 ): boolean {
+  // Only show onboarding for free trial users who have run out of credits
+  // Do NOT show for paid users who have purchased credits, even if they've run out
   return (
     usingModelsAddOnApiKey &&
+    creditStatus.optedInToFreeTrial &&
     !creditStatus.hasCredits &&
     !creditStatus.hasPurchasedCredits
   );