Last Chance To Get Prorated Annual Fee Refund From American Express By Cancelling Your Card

Introduction

On September 1st, American Express will be making changes to how they handle annual fee refunds. Previously if you cancelled your card you would receive a prorated annual fee refund, for example if you cancelled the American Express Platinum card ($450 annual fee) after paying the annual fee and holding it for three months, you would be refunded 9/12ths of the annual fee or $337.5. Keep in mind that this new rule doesn’t affect downgrades.

New Rule

Starting September 1st, you’ll receive a full refund if you notify American Express that you want to close your account within 30 days of the closing date of the billing statement on which that fee appeared. There is on exception and that is that this new rule does not apply if you’re billing address is in the Commonwealth of Massachusetts. The new rule in full can be found below:

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.

 

Your Options

If you have an American Express card with an annual fee that you don’t want to keep, you have a few options:

• Cancel the card and receive the prorated refund 
• Downgrade the card and receive the prorated refund. Remember that credit cards cannot be downgraded to charge cards and vice versa. AmEx EveryDay is probably your best option, as it has no annual fee and earns Membership Rewards points (meaning you can keep your points without having to transfer them to travel partners if you don’t have any other membership rewards earning cards). You can view all the rules for downgrading American Express cards here. Also remember that this new rule doesn’t affect card downgrades, so this will still be an option going forward.

Final Thoughts

You can view the annual refund rules for other card issuers by going here. Obviously this is a negative change from American Express, but it’s not entirely surprising given some of the tricks people were using to abuse this.