Annual fee time on a credit card is a point at which consumers make a decision whether the value of the card justifies its cost — whether to keep it for another year, or cancel.
You don’t have to cancel before the annual fee hits. As a general matter you have 30 days from the statement date on which the fee appears to cancel the card, and the card issuer will remove the fee.
Some banks have historically been more generous than this.
For instance, with many products and many consumers Chase seems to give 60 days.
American Express and Citibank, at least on certain products, have offered pro-rated refunds. That means if you cancelled halfway through your cardmember year they’d refund half of your fee.
It looks like American Express is moving away from pro-rated refunds:
Closing your Account Effective September 1, 2016, in Part 2 of the Cardmember Agreement, we are amending the Closing your Account sub-section in the Other important information section by inserting a new paragraph after the first sentence: If an Annual Membership fee applies, we will refund this fee if you notify us that you are voluntarily closing your Account within 30 days of the Closing Date of the billing statement on which that fee appears. For cancellations after this 30 day period, the Annual Membership fee is non-refundable. If an Annual Membership fee applies to your Account, it is shown on page 1 and page 2 of Part 1 of the Cardmember Agreement. If your billing address is in the Commonwealth of Massachusetts at the time you close your account, this policy will not apply to you.
This is understandable. They’re not going to want you to take advantage of the airline fee rebate that comes with a Platinum Card or Premier Rewards Gold and then get the bulk of your fee back.
If you’re going to cancel a card, bear in mind that proprietary bank points need a place for the points to sit. If you no longer have a Membership Rewards account at all, your points go away after cancelling (though American Express gives you 30 days to use your points after cancelling provided your account is in good standing). The best practice is to transfer out points or use points prior to cancelling.
I’m not familiar with Massachusetts state law in this regard, but if American Express is excluding the state from this change then there must either be a state requirement for pro-rated refunds or a process American Express needs to go through to make such a change.