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Officially "forever", but in practice depends on when Oracle got bored of offering this. FWIW I got mine sometime before the pandemic, late 2019, and my VPS still run just fine until now even though my card has already expired and I haven't bothered to update with a new card.
The card is primarily to prevent people from just creating as many accounts as they want. Sure it also made it more seamless for people to switch to the paid tier, but in practice Oracle fuck up so many registration and upgrade, I doubt it works that well.
I have been using an ARM instance since 2022 in NL DC. Never had any issues. I replaced the Ubuntu with Debian so I use official Debian kernel. works well, much better than a bunch of paid ISPs. The only negative point is that it is not a VPS by design so no option to simply reinstall or something. I need to do it from the running OS or attach the boot volume to another instance. Because I use on one VM every free tier resources it is not an option for me so I need to avoid an unbootable system if I not want to lose my VM.
Does "host capacity" increase with a paid account, even within the "always free" thresholds?
Depends on region, in Singapore I can create the ARM instances instantly but I'm lucky if I can make a free x86 instance.
Yes
I became able to create ARM instance in Tokyo region instantly after upgrading to a paid account
I read that people were terminated after upgrading to a paid account. Maybe coincidence.
Yeah you'll find the card was removed from your account and it will now be in a state where it has no payment method. Once they've fully verified you (over the course of months, they try various fake charges to make sure the card isn't a throwaway) then you're set for life and don't even need a card anymore.
I installed Debian using NetBoot.xyz (https://netboot.xyz/docs/kb/providers/oci/), you can also clean install Ubuntu this way. Afterwards you can reinstall the oracle client if you want to.. it’s a little bit of work but the. You won’t have to remove the instance and have a clean install