Has American Express Changed the Way it Calculates Annual Fee Refunds?

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Earning airline miles and hotel points through credit card signup bonuses is one the easiest ways to collect substantial amounts of miles/points here in the UK. The secret to a really successful credit card strategy though, is to regularly ‘churn’ your cards – cancel a card so that you can re-apply sometime in the future and get the signup bonus again (note that not all companies allow this).

American Express is particularly generous in this regard, allowing you to receive the full signup bonus multiple times for all its cards, as long as you wait at least 6 months after cancellation before reapplying.

Another area where American Express is unusually generous is with annual fee refunds. Some cards, like the British Airways Premium Plus or the American Express Platinum Charge Card, have hefty annual fees, but when you cancel them you get given a pro rata refund.

Whenever I’ve cancelled cards in the past, I’ve always received a refund that includes the current month. So for example, if you got an Amex Platinum Card and cancelled it sometime during your third month, you would only pay for two months and have ten months worth of the annual fee refunded.

Things seem to work a little differently now.

I just cancelled my Amex Platinum exactly 41 days into its second year. Based on previous experience, and given that the annual fee is £450, I was expecting to pay for one month and therefore receive a refund of £412.50 (£450 – £37.50). My actual refund was £400.17p, so I was charged £49.83.

What this means is that American Express annual fee refunds now seem to be calculated on a daily pro rata basis, rather than the old monthly calculation.

Whether it’s still possible to cancel before the end of the first month and get a full refund, I’m not sure, but I would doubt it based on the above.

Bottom line

I’m not saying this is a bad thing really by the way, it’s just something to be aware of. The American Express annual fee refund policy is still generous – especially so when combined with the rules on churning.

If you want to cancel an American Express Card with a fee, there’s no point waiting until the end of your statement month now, as your annual fee is effectively charged per day.

Has this been the policy for a while and I just haven’t noticed, or is it a recent change?


  1. Third Passport says

    Oh, phew, that’s a bit of a relief! I was expecting something more extreme like not being able to get a refund at all. Or paying for a minimum 6 months or something like that.

  2. JP says

    I thought it was always a pro-rata daily charged that is refunded. I don’t think they have changed the policy. The only time you get away with it is if you manage to cancel before the fee has been added to your account.

    • Joe Deeney says

      I can’t quite remember, but I’m 90% sure it used to be different. What I can definitely say 100% is that I’ve cancelled cards in the first month in the past and got a full refund – any idea if that’s still the case?

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