diff --git a/apps/ui/src/components/provider-keys/create-provider-key-dialog.tsx b/apps/ui/src/components/provider-keys/create-provider-key-dialog.tsx
index e16093d92..4f438f72e 100644
--- a/apps/ui/src/components/provider-keys/create-provider-key-dialog.tsx
+++ b/apps/ui/src/components/provider-keys/create-provider-key-dialog.tsx
@@ -196,12 +196,14 @@ export function CreateProviderKeyDialog({
 					void queryClient.invalidateQueries({ queryKey });
 					setOpen(false);
 				},
-				onError: () => {
+				onError: (error) => {
 					setIsValidating(false);
 					toast({
 						title: "Validation Failed",
 						description:
-							"Failed to validate the API key. Please check your key and region.",
+							error instanceof Error
+								? error.message
+								: "Failed to validate the API key. Please check your key and region.",
 						variant: "destructive",
 					});
 				},
diff --git a/packages/actions/src/validate-provider-key.ts b/packages/actions/src/validate-provider-key.ts
index b3d420c89..149d50aaf 100644
--- a/packages/actions/src/validate-provider-key.ts
+++ b/packages/actions/src/validate-provider-key.ts
@@ -278,6 +278,25 @@ export async function validateProviderKey(
 				};
 			}
 
+			// Treat billing/quota errors as valid key — the key is authenticated
+			// but the account has insufficient credits or hit rate limits
+			const isBillingError =
+				response.status === 402 ||
+				response.status === 429 ||
+				errorMessage.toLowerCase().includes("credit balance") ||
+				errorMessage.toLowerCase().includes("billing") ||
+				errorMessage.toLowerCase().includes("quota") ||
+				errorMessage.toLowerCase().includes("rate limit");
+
+			if (isBillingError) {
+				logger.debug("Provider key is valid but has billing/quota issues", {
+					provider,
+					model: validationModel,
+					statusCode: response.status,
+				});
+				return { valid: true, model: validationModel };
+			}
+
 			return {
 				valid: false,
 				error: errorMessage,