As you upgrade, the system credits you with the unused remaining amount and then uses that credit along with the payment.

Example: 

If you have an Essential annual plan ($1920/year), which you have subscribed to 100 days ago and decided to upgrade to an annual Pro plan ($4800/year), the system would credit you with 365 - 100 = 265 days or $1920/365 * 265 = $1393,97 and charge the difference of $4800 - $1393.97 = $3406,03 making a subscription anchor this day.

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