Get your Amex Annual Fee Prorated by Downgrading the Card
Starting September 1, Amex card will no longer have their annual fee prorated if they are cancelled 30-days after the fee posts to your account.
The good news just broke that this change only effects card cancellations, not downgrades.
Often, instead of cancelling a card with a high annual fee, we’ll do a product change and downgrade it to a different card version which comes without a fee or with a lower fee. See Best Downgrade Options for more details on this.
When doing a product change, the annual fee will continue to be prorated, as has always been the case in the past.
American Express Blue Cash Everyday vs. Amex EveryDay Credit Card
Only when cancelling a card will you lose out on the unused part as the fee won’t be prorated beginning September 1.
The only thing that changes for downgrades is that we’ll have 30 days, not 60 days, to get a full refund starting September 1.
This news was first reported on Dansdeals based on their Amex contact.
We reached out to our media contact at Amex to verify, and they came back with the same response that the new policy will only affect cancellations, not downgrades.
We will still pro-rate annual fees for upgrades or downgrades, just not cancellations.
This should hold true for personal and small business cards, and should hold true whether you downgrade to a card with a fee or a card with no annual fee at all.
On a practical level what this means is that when you downgrade your $450 Platinum card halfway through the year to the $95 Green card, you’ll still get $225 refunded for the half unused Platinum year, and you’ll get charged $42.50 for the half upcoming Green year.
If you subsequently cancel the Green card, you’ll lose the entire $42.50 since cancellations don’t get prorated.
Thus, if you have a charge card (Platinum or Gold or PRG) the cheapest card to downgrade to is the $95 Green card, and there’s no way to get out of losing a minimum of a prorated $95. If you have a credit card (BCP, EDP, etc.), you can downgrade to a no-fee card and get the fee prorated.
Afterward, you can cancel the no-fee card if you want to.
[Update 8/23/19: a reader notes that when downgrading, even within 30 days, it processes as a prorate, so you’ll end up losing a bit by downgrading instead of cancelling if you’re doing it after the annual fee posts.]