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What functionality do you need via the API?
Create VM and manage it, using the balance i will deposit.
What is considered cheap?
affordable
Very affordable.
So, OP is asking free VPS.
Hetzner Cloud?
Any provider that offers resource bundles/reseller should give you access to the management panel's (e.g. virtualizor/solusvm) API for that allows you to create/destroy out of your allocation.
For package management most billing panels offer an upgrade/downgrade API to upgrade/downgrade your allocation/package. Mind that wouldn't be billed based on usage as they are usually preset by the host.
That opens up a large portion of hosts, just drop them a e-mail/ticket prior to signup/purchase to confirm.
We can offer resource pools, so you can create your own VMs. An API is also available to create/destroy VMs. Do you know what kind of resources (RAM/HDD/etc) you would need?
We provide REST API with our KVM VPS