Published on June 5th, 2016 | by Chuck21
Amex to Eliminate Prorated Annual-Fee-Refunds Starting September
Starting in September, Amex will no longer prorate the annual fee when you cancel a card. This change is showing on the monthly statements of all Amex cards being sent out since the past few days.
Currently, the policy of American Express is to pro-rate the annual fee and refund you the unused portion. This especially makes a difference for expensive annual fees like the $450 Platinum annual fee. Under the new rules, if you cancel the card in mid-year you won’t get any part of the $450 back. And the same goes for all other cards with an annual fee.
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.
As before, Amex will still refund the entire annual fee if you close the account within 30 days of closing date of the statement that the annual fee is showing.
A few notes:
- This change only affects card cancellations; downgrades will still receive a prorated fee as we discuss in this post
- Those with a billing address in Massachusetts will retain the old rules and will continue to get prorated refunds on the annual fee
- You still get 30 days from the statement closing date that the annual fee appears; this might be more than 30 days from when the actual fee hit
- The terms indicate that if Amex were to shut down your account for whatever reason, then they will prorate the annual fee; the new change only affects voluntary account closures
[Related: Annual Fee Refund Rules For Each Card Issuer]
I suspect this is all part of the review Amex was doing due to the influx of new Platinum cardholders. An important element that enables Amex to continue offering strong signup bonuses on those cards is the mandatory $450 annual fee ($475 for Mercedes-Benz), not waived the first year. Under the new rule, there won’t be any way out of the annual fee unless you manage to get the bonus and close the account very quickly.
Bear in mind that you get the $200 airline incidental credit once per calendar year so there is benefit in keeping the card for the year. Also note that this change is only taking effect on September 1. Those who have Platinum cards from the recent 100k bonus or the 75k MB bonus (ongoing for a few more weeks!) can still cancel and get the pro-rated refund. Personally, I opt to keep the card for a year with the hopes of maintaining a better relationship with Amex.
We’ll update the post Annual Fee Refund Rules For Each Card Issuer and the post 19 Things Everybody Should Know About American Express to reflect the new terms.
Hat tip to DrGForce on r/churning