Prorated Amex Annual Fee with Card Downgrade

Starting September 1, 2016, American Express cardholders will be subject to a new annual fee refund policy; Individuals with an American Express card will no longer be able to even have their annual fees prorated if they have cancelled their card 30 days after the fee posts to the account. On the other hand, you will still receive an annual fee prorated refund if you choose to downgrade your card to a different card version within 30 days of fee post. Keep in mind that downgrades will no longer have 60 days to get a full refund.

American Express Annual Fee & Card Downgrade Summary:

• 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.
• We will still pro-rate annual fees for upgrades or downgrades, just not cancellations.
• If your billing address is in the Commonwealth of Massachusetts at the time you close your account, this policy will not apply to you.
• The terms indicate that if Amex were to shut down your account for any particular reason, then they will prorate your annual fee; the new change will only have an affect on voluntary account closures

American Express Best Downgrade Options:

1. AmEx EveryDay: This is a well-balanced, rounded credit card that offers no annual fee and allows you to earn American Express MR points, meaning if you downgrade to this card, you’ll still have the option to transfer your points to airlines and hotel providers. You will earn points based on 2x points at US supermarkets, on up to $6,000 per year in purchases (then 1x); 1x points on other purchases.
2. Blue Cash Everyday: This card has no annual fee and Earned Cash Back: 3% at U.S. supermarkets on up to $6,000 per year in purchases, 2% at U.S. gas stations & select U.S. dept stores, 1% on other purchases.

American Express Downgrade Rules:

• Annual benefits (e.g $200 airline reimbursement) are on a calendar year basis rather than cardholder year (e.g you could apply in December, get a $200 reimbursement in December and then another in January and then cancel in February and you’ll get most of the annual fee refunded back.
• You cannot downgrade charge cards to credit cards.
• Ongoing benefits (e.g airport lounge access) require you to have an active card

Conclusion:

American Express’s New Annual Refund Policy that comes into affect September 1, 2016 will surely apply for personal and small business cards as well as cards with annual fees and cards without. The main reason why downgrades are quite popular with the Platinum card is because the $450 annual fee is way too hefty of a price to pay and people want to take advantage of the $200 Airlines credit without having to pay the full annual.

When you downgrade your Platinum card ($450) 6 months into a year to a Green Card with an AF of $95, you’ll still receive the partial $225 refunded for half of the year that was considered “un-used,” however, you will still be charged for the $42.50 for half of the year that you used the green card. Keep in mind that if you cancel the green card, you’ll lose the entire $42.50 now that cancellation aren’t prorated. Also, you cannot downgrade charge cards to credit cards.

I always recommend downgrading to the Amex Everyday because there’s no annual fee and MR points are easily available and ready to transfer. Don’t forget to also check out our full list of American Express Card Promotions as well as other  Credit Card Promotions today!