You'll lose a lot of signups. On the other hand, your signup-to-actually-pays conversion gets dramatically higher. (Appointment Reminder captures CCs at signup and will successfully charge north of 50% of those accounts at least once.)
I am extremely reluctant to give anyone my credit card number. If I used your free service and it works great, I will consider it. But the chance that I will give my CC number to a service I have just heard of is basically zero.
I understand that have data on this and the customers who converge outnumber the ones that you loose, but it might diver per demographic. Paying with credit cards is less common in Europe than in America, so that might play into it. What might help is get a seal of approval from some organization that you are safe. If you have social proof it's even better.
EDIT: I might also be worth considering if non-paying customers are really just a liability to you. I understand the bottom line is what counts at the end of day, but free customers might recommend your service to someone else or they might come back later when they really need your service.
It would be ok to lose signups from people who would not ever buy your product, but I don't think that's the case.
I for one, subscribe to a lot of SaaS but would never put in my CC number just for a trial.
And what about corporate customers? I think many subscribers can come from corporations where someone somewhere tried the product and liked it, and then made sure his company paid for it. If he had to enter his CC# before he could even try he would probably not do it.
I think the target population matters. If you're selling to teachers or dentists, then you should speak to teachers or dentists to learn what they will do or not do.
If you're offering a jQuery framework, then HN seems pretty relevant as far as the people susceptible to subscribe to your services.
I was thinking that I would be reluctant too, but then I realised that I have given plenty of SaaS companys my CC up front - sometimes not even for a free trial (but usually with a moneyback guarantee). E.g Linode and JungleDisk.
On the day after the CC charge - do you have people terminating the account? Somehow, I feel this might lead to people forgetting their 30-day trial and will terminate when they realize they have been charged. Ofc, it's their problem if that happens. Curious, and just hypothesizing.
Every subscription business will have a) people who pay for but don't use the service and b) people who pay for but don't use the service and ask for refunds. If you ignore your emails telling you "Thanks for signing up for AR, friendly reminder, your trial ends in 3 days." and the subsequent ones reminding you every month, I'll happily take your money rather than second guessing your business decisions. (I used to pester people about that but plural people literally said "Stop pestering me! I get it! We bought it now but won't use it until March. No I don't care about paying extra! Its like $80 a month, why would I care?!")
I get a notification when anyone unsubscribes and, if it looks sort of borderline (e.g. sent one test phone call on the first day, never used the service again, and then canceled on day 33) I offer to refund their money. I get about 50% uptake on that. This makes me sort of anomalous in the industry (take a look at e.g. 37Signals policy on refunds -- "We. Don't. Refund." -- which is much more common) but it works at my scales because AR doesn't have so many accounts at the moment that sending an email or two a week is a big tax on my time. (And, of course, I don't lose sleep at night over $9 or $29 or $79 in revenue. It is literally rounding error for me -- if the yen hiccups that is much more painful.)
At the risk of stating the obvious: the business model is not hoping that people will forget about their subscription to Appointment Reminder. The business model is in convincing them to log into the site every day, run their business off AR, and call my cell phone at 3 AM in the morning to scream at me if anything goes wrong because that way I can get them to pay me thousands of dollars.
