Amex fee refund change: what it means for you

You’ll no longer get a pro-rata refund from American Express.

*Update – Amex paused this change for the second time, and said it wouldn’t start until at least 1 August 2024. We contacted them on 13 September and it confirmed there was no news on this yet*

One handy feature of American Express credit cards is that you’ve been able to get a partial refund if you cancelled the card mid-way through the year.

That’s allowed keen money savers to take advantage of massively boosted welcome offers and promotions for part of the year, without committing to 12 months of massive fees.

That’s all about to change, with the end to pro-rata refunds when you cancel mid-year. Here’s what it means for the Platinum, Gold, BA Premium Plus, Platinum Cashback cards and more.

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Big Amex fee refund changes

There are plans to eventually stop customers from getting a partial refund on American Express annual fees when they cancel. This will have a big impact on the welcome offers available with some cards.

As reported by the website Head for Points, this new rule is the default for all cards opened since 1 June 2023.

For older cards the terms and conditions have changed in the following months.

The end of refunds itself was initially due to start on 2 October 2023, however, Amex has confirmed to us that this will be temporarily postponed.

You can still get a pro-rata refund for any unused months until the new deadline is announced. And we’ll update you as soon as we get confirmation on the new date.

Which Amex cards charge an annual fee?

Not all American Express cards charge you to have one, or at least not in the first year. The key cards that will charge you are as follows:

• American Express Platinum – £575 a year
• BA Premium Plus American Express – £250 a year
• American Express Preferred Rewards Gold – £160 (free in year one)
• American Express Nectar – £25 a year (free in year one)
• Amex Platinum Cashback Credit Card – £25 a year

Amex Platinum

This is the big card where this change could impact you the most when the changes kick in. At £575 a year it’ll obviously cost you a fair whack. I don’t think the benefits it offers, such as insurance, will justify most people paying those fees year after year. Here’s my review for more details of the features you get.

I’d previously have suggested you only keep this card open for the duration of the welcome offers. You get the extra points and then you ditch the card. But from October you won’t be able to do this – the full fee will be payable.

I think it really only makes sense to apply for this cards when those welcome deals are temporarily boosted, though as a result of the change these promotions will be less profitable.

For example, when I wrote about the recent Amex Platinum increased welcome promotion I said it could be worth £815 by stacking all the different offers. But this valuation relied on cancelling the card after seven months. If the same offer was to return, the profit would be reduced to £575. That’s still great, but you’ll be down £240.

If you are someone who did open the card this summer and are midway through your spending of £6,000 in six months, it’s worth checking your progress in the app to see if you are able to reach this total before the new deadline is announced.

It’s worth noting that doing this will reduce your return – if the new deadline is before 1 January 2024. That’s because you’ll miss out on the extra £150 restaurant credit and £50 Harvey Nicholls cashback that reset on that day.

Remember too that if you do cancel the Platinum (or Gold card) you need to ensure you’ve either used all your Amex Reward points or have another Amex card that collects these points (such as the free Amex Reward card) to keep the points alive.

BA Premium Plus Amex

Again, the boosted welcome offer is the main reason I’d encourage people to consider this card. So, as with the Platinum, you’ll make a smaller profit by having to keep this card for the whole year.

However, the difference with this over the others is there is a perk that you’d probably need to keep your card active for close to 12 months to earn. That’s the British Airways “companion voucher”, which basically operates like a 2-4-1 offer.

You need to spend £10,000 in 12 months to trigger this. Since you effectively need to have the card for a year, it means you’re paying that £250 fee in order to save on a future flight.

This might be worthwhile, especially if you’re going to travel business class. But you will need to have enough Avios points to cover the entire ticket price. And you will have to cover taxes in cash on top. Plus you’ll be limited to fly when BA has availability.

Personally I think it’s only worth getting the card when a boosted offer runs. For the last few years it’s been in January, though another offer is running September 2023.

By the way, if you have a card opened before 1 June and want to cancel this card for a pro-rata refund before the new deadline is announced, you can simply downgrade to the free BA Amex card rather than close it completely.

However if you’ve not already earned the companion voucher, the terms will change on the free card. You’ll need to spend £12,000 in the year and the voucher won’t be valid on non-Economy classes. So it makes sense to trigger the better voucher before doing this if that’s possible.

An alternative you might want to consider is the Barclaycard Avios Plus credit card. Though the fee is similar (£240 a year), you pay monthly. That means you could cancel (or downgrade to the free option) as soon as you hit the upgrade voucher threshold.

Amex Platinum Cashback card

The pro-rata refund on fees also applies to some of the cheaper cards, but the one where it’ll make a difference is the Platinum Cashback card.

Since the annual fee is much lower, if you did want to cancel midway through the year you’d not lose as much money. And of course you could cancel before the new deadline to get a partial refund now. But there’s an important reason not to do this.

That’s because you won’t get paid the year’s cashback until a month after the anniversary date. Initially I feared this meant an ever lasting circle where you’d have to pay in full every 12 months in order to access the cashback earned from spending, and repeat, repeat, repeat year after year.

Here’s how that would look

• Open card on 1/7/23 and pay £25 annual fee
• Get charged fee again on 1/7/24
• Receive cashback on 1/8/24

I contacted the Amex press office for clarification, and this can be avoided – but it will be tricky. You’ll have 30 days to cancel the card each time it renews. So you’ll need to make a note to cancel exactly 30 days after the renewal happens, assuming the cashback has been paid on time. Do this and you’ll get your £25 fee refunded without losing the earnings.

Of course, there’s lots of ways that could go wrong. What about 31 day months? Would weekends or bank holidays impact the cashback payment date?

If you currently have the card and it renews after October 2023, stick with it for now so you get your money. Just make sure you do cancel on the same day if you don’t want to continue with the card for another year.

However I’d suggest new customers steer clear of this card. There are better options out there in most cases and you won’t the risk getting caught out.

Amex Nectar

The rule change has the smallest impact on the Amex Nectar card. You earn points as you spend so if you did cancel at the end of 12 months there’s nothing to worry about. Personally I’d probably only keep this for one year anyway and move on to a free alternative once the year two fee kicks in.

Amex Preferred Rewards Gold

The final key card with a fee worth talking about is the Amex Gold. It’s free in year one, so most don’t need to worry. However the £160 fee from year two onwards is hard to justify (here’s my review).

It’s even more important then before that you make a note in your diary to cancel this card at the end of the first year so you don’t accidentally find yourself paying well over the odds.