American Express Eliminating Pro-rated Annual Fee Refunds

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.

(HT: reddit)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. So then we should cancel before September 1st 2016 to get pro rated refund. I recently received 100,000 MR points from a business amex sign up bonus. Been debating whether to close account after using $200 airline reimbursement and $100 tsa precheck reimbursement and get $450 annual fee refunded (only hade card one bill cycle) keep it until I get 2nd $200 airline reimbursement next April. Think the smarter thing to do would be close now. any reason I should keep card active instead of closing now?

  2. I attempted to close my BOA Alaska Airlines card last year after being charged an annual fee. I called BOA to close my account a couple of days after the fee posted and requested a refund of the fee. I was told the fee was non refundable. Was the agent following policy??

  3. I live in MA so would love to learn the lowdown of why MA is exempt and whether I may have certain rights I didn’t know about with all card issuers as a result. Can anyone shed light on this?

  4. @Tim Seems like weasel words to me. The fee may well be non-refundable if you have already paid it and the due date for the charge has passed. But you didn’t have to pay it in the first place if you canceled the card before the due date for the fee. 😉

  5. @Tim, if I recall correctly, BofA warns you 60 days and 30 days ahead of time that the fee is coming and that you have to cancel before it hits to avoid paying it.

  6. Park the rewards! I just got my 1st time AmEx everyday card to park my MR points cause annual fee coming due on my last Gold card. And I also got 25K MR sign up bonus for only $1K spend

  7. I am amazed to learn that credit card companies ever allowed pro-rata annual fee refunds at all.
    Closing this generous condition is no doubt an attempt to retain a bit of revenue from churners, who are in plague proportions in the readership of this and other similar blogs, who have no intention whatsoever of fulfilling anything other than the absolute minimum requirements to obtain and keep the slabs of miles/rewards the issuers offer to entice sign-ups.
    Just one more little thing you need to know to keep ahead of the game.

  8. @Gary Leff, just wanted to thank you for posting this. I had been holding off on cancelling my long unused Amex Gold (not PRG) because I didn’t want to create any credit ripples before I got the Sapphire Reserve. I cancelled the Gold today and claimed 5 months worth of prorated membership I wouldn’t have been able to if I waited another week.

  9. I spoke to an AmEx rep in the Retention (“Membership Consulting”) department today, 9/3/16. She said that AmEx had changed this policy “due to feedback from customers”, and that customers who have mutliple AmEx cards will still receive a prorated refund of an annual fee when canceling a card. If you are canceling your LAST AmEx card, then there will be no prorated refund. I pressed her on this, and pointed out the wide publicity of the no-prorated-refund announcement, and she said, “Yes, this was just reversed two days ago.”

  10. I can confirm that my platinum business card fee is promised back to me prorated. I keep the points cuz I have other Amex MR cards.

  11. Can anyone confirm from above posted posts to have actually receive their prorated refunds on canceling amex cards? I see that Amex representatives have been saying that we will get the prorated refund if you still have some other existing Amex cards, but don’t see any actual data points.

  12. So if you have a PRG and your $195 annual fee is due on September 1st, you could essentially use your $100 airline credit on September 2nd, close the card a week later, and get your full $195 annual fee refunded because it’s within the 30 day window.
    You would pretty much be coming out ahead $100 because you used your airline credit already, and then got Amex to refund you the full $195 annual fee.
    Is that right? Or will Amex deduct the $100 airline credit from your annual fee refund??
    Asking for a friend lol

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