diff --git a/docs/cs-10438-assistant-credit-message-timing-plan.md b/docs/cs-10438-assistant-credit-message-timing-plan.md
new file mode 100644
index 0000000000..7c654d08a4
--- /dev/null
+++ b/docs/cs-10438-assistant-credit-message-timing-plan.md
@@ -0,0 +1,28 @@
+## Goal
+- Prevent the AI assistant from showing “Credits added!” unless we have
+  evidence the balance increased after an out-of-credits error.
+
+## Assumptions
+- The out-of-credits error text can appear even when the cached balance
+  is already above the minimum, so we should avoid claiming credits were
+  added in that case.
+- It is still desirable to show “Credits added!” after the balance
+  transitions from below-minimum to above-minimum while the error is
+  displayed.
+
+## Plan
+1. Update `AiAssistantMessage` to track whether the balance was below the
+   minimum the first time an out-of-credits error is shown.
+2. Only render the “Credits added!” label when the error was first shown
+   while below the minimum and the balance is now above it.
+3. Add an integration test that simulates an out-of-credits error while
+   the billing service already reports sufficient credits, asserting that
+   “Credits added!” does not render (but Retry does).
+
+## Target Files
+- `packages/host/app/components/ai-assistant/message/index.gts`
+- `packages/host/tests/integration/components/ai-assistant-panel/general-test.gts`
+
+## Testing Notes
+- Run `pnpm lint` in `packages/host`.
+- If feasible, run a focused Ember test for the new scenario.
diff --git a/packages/host/app/components/ai-assistant/message/index.gts b/packages/host/app/components/ai-assistant/message/index.gts
index c275360a6c..8fc37fc444 100644
--- a/packages/host/app/components/ai-assistant/message/index.gts
+++ b/packages/host/app/components/ai-assistant/message/index.gts
@@ -5,6 +5,7 @@ import { action } from '@ember/object';
 import { service } from '@ember/service';
 import type { SafeString } from '@ember/template';
 import Component from '@glimmer/component';
+import { tracked } from '@glimmer/tracking';
 
 import Modifier from 'ember-modifier';
 import throttle from 'lodash/throttle';
@@ -233,6 +234,28 @@ class ScrollPosition extends Modifier<ScrollPositionSignature> {
   }
 }
 
+interface OutOfCreditsSnapshotSignature {
+  Args: {
+    Named: {
+      isOutOfCredits: boolean;
+      recordSnapshot: (isOutOfCredits: boolean) => void;
+    };
+  };
+}
+
+class OutOfCreditsSnapshot extends Modifier<OutOfCreditsSnapshotSignature> {
+  modify(
+    _element: HTMLElement,
+    _positional: [],
+    {
+      isOutOfCredits,
+      recordSnapshot,
+    }: OutOfCreditsSnapshotSignature['Args']['Named'],
+  ) {
+    recordSnapshot(isOutOfCredits);
+  }
+}
+
 function isThinkingMessage(s: string | null | undefined) {
   if (!s) {
     return false;
@@ -256,6 +279,8 @@ export default class AiAssistantMessage extends Component<Signature> {
   @service declare private operatorModeStateService: OperatorModeStateService;
   @service declare private billingService: BillingService;
 
+  @tracked private wasOutOfCreditsAtError: boolean | undefined;
+
   private get isReasoningExpandedByDefault() {
     let result =
       this.args.isStreaming &&
@@ -354,7 +379,14 @@ export default class AiAssistantMessage extends Component<Signature> {
 
         {{#if this.errorMessages.length}}
           {{#if this.isOutOfCreditsErrorMessage}}
-            <Alert @type='error' as |Alert|>
+            <Alert
+              @type='error'
+              {{OutOfCreditsSnapshot
+                isOutOfCredits=this.isOutOfCredits
+                recordSnapshot=this.recordOutOfCreditsSnapshot
+              }}
+              as |Alert|
+            >
               <Alert.Messages @messages={{this.errorMessages}} />
               {{#if this.isOutOfCredits}}
                 <Alert.Action
@@ -363,9 +395,11 @@ export default class AiAssistantMessage extends Component<Signature> {
                 />
               {{else if @retryAction}}
                 <div class='credits-action-row'>
-                  <div class='credits-added' data-test-credits-added>
-                    Credits added!
-                  </div>
+                  {{#if this.shouldShowCreditsAdded}}
+                    <div class='credits-added' data-test-credits-added>
+                      Credits added!
+                    </div>
+                  {{/if}}
                   <Alert.Action @actionName='Retry' @action={{@retryAction}} />
                 </div>
               {{/if}}
@@ -506,6 +540,21 @@ export default class AiAssistantMessage extends Component<Signature> {
   private get isOutOfCredits() {
     return !this.hasMinimumCreditsToContinue;
   }
+
+  @action
+  private recordOutOfCreditsSnapshot(isOutOfCredits: boolean) {
+    if (this.wasOutOfCreditsAtError === undefined) {
+      this.wasOutOfCreditsAtError = isOutOfCredits;
+    }
+  }
+
+  private get shouldShowCreditsAdded() {
+    return (
+      this.isOutOfCreditsErrorMessage &&
+      !this.isOutOfCredits &&
+      this.wasOutOfCreditsAtError === true
+    );
+  }
 }
 
 interface AiAssistantConversationSignature {
diff --git a/packages/host/tests/integration/components/ai-assistant-panel/general-test.gts b/packages/host/tests/integration/components/ai-assistant-panel/general-test.gts
index c06037c1fe..e7c4fe1525 100644
--- a/packages/host/tests/integration/components/ai-assistant-panel/general-test.gts
+++ b/packages/host/tests/integration/components/ai-assistant-panel/general-test.gts
@@ -857,6 +857,39 @@ module('Integration | ai-assistant-panel | general', function (hooks) {
     assert.dom('[data-test-credits-added]').exists();
   });
 
+  test('it does not claim credits added when balance is already sufficient', async function (assert) {
+    let roomId = await renderAiAssistantPanel();
+
+    let billingService = getService('billing-service');
+    let attributes = {
+      creditsAvailableInPlanAllowance: 20,
+      extraCreditsAvailableInBalance: 0,
+    };
+
+    billingService.fetchSubscriptionData = async () => {
+      return new Response(JSON.stringify({ data: { attributes } }));
+    };
+
+    await billingService.loadSubscriptionData();
+    await settled();
+
+    simulateRemoteMessage(roomId, '@aibot:localhost', {
+      body: 'You need a minimum of 10 credits to continue using the AI bot. Please upgrade to a larger plan, or top up your account.',
+      msgtype: 'm.text',
+      format: 'org.matrix.custom.html',
+      isStreamingFinished: true,
+      errorMessage:
+        'You need a minimum of 10 credits to continue using the AI bot. Please upgrade to a larger plan, or top up your account.',
+    });
+
+    await waitFor('[data-test-message-idx="0"]');
+    assert.dom('[data-test-alert-action-button="Retry"]').exists();
+    assert.dom('[data-test-credits-added]').doesNotExist();
+    assert
+      .dom('[data-test-alert-action-button="Buy More Credits"]')
+      .doesNotExist();
+  });
+
   test('it can retry a message when receiving an error from the AI bot', async function (assert) {
     let roomId = await renderAiAssistantPanel();