diff --git a/src/content/docs/support-and-community/plans-and-billing/pricing-faqs.mdx b/src/content/docs/support-and-community/plans-and-billing/pricing-faqs.mdx
index 431b1660a..2ce694419 100644
--- a/src/content/docs/support-and-community/plans-and-billing/pricing-faqs.mdx
+++ b/src/content/docs/support-and-community/plans-and-billing/pricing-faqs.mdx
@@ -88,8 +88,10 @@ You can use your Warp account on multiple personal computers. Warp is designed t
 
 ### What happens when I downgrade during a billing cycle?
 
-The subscription will downgrade to the lower plan limits at the end of the billing cycle. If you’re switching between paid plans, any AI usage you've already accumulated will carry over.\
-\
+Downgrades take effect immediately. Warp issues an account balance for the prorated difference based on the time remaining in your billing cycle, not on unused monthly AI credits. You can apply that balance toward future subscription payments or AI credit purchases. The account balance amount is visible in the billing portal invoice history.
+
+Any AI credits you've already used in the current cycle count against the lower plan's monthly limit. If your usage has already exceeded that limit, you won't receive more AI credits until your next billing cycle.
+
 You can downgrade at any point throughout your subscription through the billing portal by going to **Settings** > **Billing and usage** > **Manage billing**.
 
 ### What happens when I cancel during a billing cycle?