How to fix Cursor “Agent and Edit rely on custom models that cannot be billed to an API key.” Error

If you’ve been loving Cursor for its AI-powered coding magic, you might’ve hit a frustrating roadblock recently. The Bring Your Own Key (BYOK) option, which let you use your own API keys to access Cursor’s advanced features without a subscription, has effectively been killed off for non-subscribers. Yep, it feels like a bait-and-switch, and you’re not alone in noticing this shift. In this conversational guide, we’ll break down what’s happened, why it matters, and how you can keep using BYOK with a solid alternative. Let’s dive in and explore your options!

What Was Cursor’s Bring Your Own Key Feature?

For the uninitiated, Cursor is an AI-enhanced code editor that’s like VS Code on steroids, offering features like intelligent code completion, multi-line edits, and an Agent mode for automating complex tasks. The Bring Your Own Key (BYOK) option allowed you to plug in API keys from providers like OpenAI, Anthropic, or Google to power these features without paying for Cursor’s Pro ($20/month) or Business plans. It was a budget-friendly way to enjoy premium tools like Chat, Composer, and Agent mode, with costs billed directly to your API provider account.

But here’s the kicker: recent changes have gutted this feature for non-subscribers, leaving many developers feeling blindsided. Let’s unpack what’s going on.

Cursor’s BYOK Ban: What Changed?

If you’ve tried using Cursor with your own API keys recently, you might’ve seen an error like this: “Agent and Edit rely on custom models that cannot be billed to an API key.” Ouch. According to user reports on platforms like Reddit and Cursor’s community forums, this change means that non-subscribers can no longer use their own API keys (e.g., from Anthropic or Google) to access advanced features like Agent mode (for end-to-end task automation) or Edit (for intelligent code refactoring). These features now require a Pro or Business subscription, even if you have a valid API key.

This shift makes the BYOK option nearly useless for free-tier users, as core AI functionalities are locked behind Cursor’s paid plans. It feels like a sneaky move to push users toward subscriptions, especially since BYOK previously granted access to these tools. As one Reddit user put it, it’s like Cursor pulled a “bait-and-switch” to drive revenue, leaving developers who relied on BYOK for cost-effective coding in a tough spot.

Why does this matter? For many, BYOK was a way to avoid Cursor’s $20/month fee while still leveraging powerful LLMs like Claude 3.5 Sonnet or Gemini. With API costs dropping (e.g., Anthropic’s rates are lower than Cursor’s subscription for heavy users), BYOK was a smart choice for budget-conscious devs. Now, you’re forced to pay Cursor’s subscription or lose access to the features that made it special.

The Impact of Cursor’s BYOK Ban

This change has big implications:

• Cost Increase: If you were using BYOK to avoid Cursor’s $20/month fee, you now face paying for a Pro plan or losing access to Agent and Edit modes. For heavy users, this can be pricier than managing API costs directly.
• Reduced Flexibility: BYOK let you choose specific models (e.g., Claude 3.5 Sonnet for coding). Now, you’re tied to Cursor’s default models unless you subscribe.
• Privacy Concerns: Even with BYOK, Cursor routes requests through its AWS servers, which some users worry about for data privacy. The ban doesn’t fix this but limits your control further.
• Community Backlash: Posts on X and Reddit show frustration, with users feeling misled by the sudden change after relying on BYOK for full functionality.

So, what’s the alternative if you want to keep using BYOK? Enter Cline, a free, open-source VS Code extension that supports BYOK and delivers similar AI-powered coding features. Let’s explore how to set it up!

The Alternative: Using Cline with BYOK in VS Code

If you’re bummed about Cursor’s Bring Your Own Key ban, Cline is your new best friend. It’s an open-source VS Code extension that replicates much of Cursor’s AI magic, including code completion, chat, and multi-file editing, while fully supporting BYOK with providers like Anthropic, OpenAI, and Mistral. Here’s how to get started with Cline and keep your BYOK workflow alive.

Step 1: Install Cline in VS Code

Let’s get Cline up and running in Visual Studio Code. It’s quick and straightforward!

1. Open VS Code and Access the Extensions Marketplace:

• Launch Visual Studio Code on your computer (download from code.visualstudio.com if needed).
• Click the Extensions icon in the Activity Bar (or press Ctrl+Shift+X on Windows/Linux, Cmd+Shift+X on macOS).

2. Search for Cline:

• Type “Cline” in the search bar and hit Enter.
• Find the Cline extension (by nickbaumann98, check github.com/cline/cline).

3. Install Cline:

• Click Install. Once installed, you’ll see the Cline icon in the Activity Bar.

Step 2: Get Your API Key

To use Cline with BYOK, you’ll need an API key from a provider like Anthropic, OpenAI, or Mistral. Here’s how to get one from Anthropic (Claude 3.5 Sonnet is great for coding):

Sign Up with Anthropic:

• Visit anthropic.com and create an account (free to sign up).

Generate an API Key:

• Go to the Developer or API section in your Anthropic dashboard.
• Click Create API Key, name it (e.g., “Cline-Coding”), and copy the key.
• Store it securely (e.g., in a password manager).

Tip: You can also get keys from OpenAI (platform.openai.com) or Mistral (mistral.ai). Check pricing on their sites, as costs vary.

Step 3: Configure Cline with BYOK

Now, let’s hook up your API key in Cline to enable AI features.

Open Cline Settings:

• Click the Cline icon in the VS Code Activity Bar to open the Cline panel.
• Click the gear icon (settings) in the top-right corner of the panel.

Select Your Provider:

• In the settings, go to Model Providers.
• Choose your provider (e.g., Anthropic for Claude 3.5 Sonnet).

Enter Your API Key:

• Paste your Anthropic API key into the API Key field.
• Optionally, set the Model to claude-3-5-sonnet-20241022 (or your preferred model).

Save Settings:

• Click Save. Cline will verify the key and connect to the provider.

Note: Unlike Cursor, Cline sends requests directly to your provider, bypassing third-party servers for better privacy.

Step 4: Test Cline with BYOK

Let’s make sure Cline is working with your API key:

Open the Cline Panel:

• Click the Cline icon in the Activity Bar to access the chat interface.

Try a Coding Task:

• Type:

Generate a Python function to sort a list of dictionaries by a key.

• Cline should respond with something like:

def sort_dicts_by_key(dict_list, key):
    return sorted(dict_list, key=lambda x: x[key])

Test Codebase Queries:

• Open a project folder in VS Code, then try:

Find all functions in src/api/userService.ts

• Cline will scan your codebase and list functions, leveraging its context-aware abilities.

Use Inline Edits:

• Highlight code, press Ctrl+L (or Cmd+L on macOS), and enter:

Refactor this to use async/await.

• Cline will suggest refactored code, which you can accept or tweak.

Step 5: Explore Cline’s Features

Cline offers features similar to Cursor, all accessible with BYOK:

• Code Completion: Context-aware suggestions as you type, powered by your chosen model.
• Multi-File Edits: Update multiple files with a single prompt, great for refactoring.
• Memory Bank: Stores custom instructions for consistent workflows (see [github.com/nickbaumann98/cline_docs](https://github.com/nickbaumann98/cline_docs/blob/main/prompting/custom instructions library/cline-memory-bank.md)).
• Model Flexibility: Supports Claude 3.5 Sonnet, Mistral Codestral, and more, with no feature lockouts.

Why Cline Is a Great Cursor Alternative

Unlike Cursor’s restricted BYOK, Cline lets you use your API keys without limitations, offering:

• Full Feature Access: No paywalls for Chat, Edit, or Agent-like modes.
• Cost Control: Pay only your provider’s API costs, which can be cheaper than Cursor’s $20/month for heavy users.
• Open-Source: Customize or contribute to Cline’s codebase (github.com/cline/cline).
• Privacy: Direct API calls reduce reliance on third-party servers.

Users on X and Reddit praise Cline for its responsiveness and flexibility, especially for multi-file projects and integration with top models like Claude 3.5 Sonnet.

Troubleshooting Tips

• Invalid API Key? Double-check your key in the provider’s dashboard and ensure it has the right permissions.
• Cline Not Responding? Verify your internet connection and restart VS Code. Check Cline’s logs in the Output panel.
• Slow Performance? Try a lighter model (e.g., Gemini 2.0 Flash) or ensure your provider isn’t rate-limited.
• Feature Missing? Update Cline to the latest version via the Extensions panel.

Why Cursor’s BYOK Ban Hurts

Cursor’s decision to lock Agent and Edit modes behind subscriptions, even for BYOK users, feels like a step back. It reduces flexibility, increases costs, and alienates developers who preferred managing their own API expenses. While Cursor’s polished interface and proprietary models are great, the ban makes it less appealing for budget-conscious or privacy-focused devs.

Cline, on the other hand, keeps the BYOK spirit alive, offering a free, open-source alternative that doesn’t skimp on features. Our test with a Python sorting function and codebase query showed Cline’s power, and its community-driven development ensures it stays up-to-date with models like Claude 3.5 Sonnet.

Conclusion

Cursor’s Bring Your Own Key ban is a bummer, forcing non-subscribers to pay for Pro or Business plans to access Agent and Edit modes. If you’re frustrated by this change, Cline in VS Code is a fantastic alternative, letting you use your own API keys with no feature lockouts. From installing Cline to running AI-powered coding tasks, you’re now equipped to keep your workflow cost-effective and flexible.

Have you tried Cline or found other Cursor alternatives? Drop a comment—I’d love to hear your thoughts or tips!