American Express ending pro-rata fee refunds in the USA from September – UK to follow?
Links on Head for Points may support the site by paying a commission. See here for all partner links.
American Express is having a bad time of things at the moment. The loss of the Costco contract in the US was a hammer blow to the business (I thoroughly recommend reading the story here) and there has been a drip of other contract losses.
The potential loss of the Starwood Preferred Guest card – which is a big deal in the US – also hangs over it, as Marriott has a long established deal with Visa.
I occasionally get emails from people asking why American Express does pro-rata fee refunds on its cards when you cancel. The answer, from a friend who worked in card operations in London for a major US bank, is that it is because Amex does this in the US and it needs to standardise policies for accounting reasons.
American Express is now changing the rules in the US with the following message appearing on statements:
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.
You can see why it would do this. Let’s imagine that Amex earns, in the UK, £25m per year from annual fees. At any point in time, 50% of that revenue is at risk of being refunded and so it cannot be treated as income.
Switching, overnight, to a system which did not allow refunds would immediately add £12.5m of profit. I have no idea what the US number would be but it would be many times larger. It is a tempting target for a CEO who is now under threat of takeover and who is desperate to make his numbers look good.
There is no certainty that the same rules will apply here. However, if the only reason it didn’t already happen here is that Amex wanted its global accounting policies to match, it may well be on the way.
PS. If you are not a regular Head for Points visitor, why not sign up for our FREE weekly or daily newsletters? They are full of the latest Avios, airline, hotel and credit card points news and will help you travel better. To join our 70,000 free subscribers, click the button below or visit this page of the site to find out more. Thank you.
Want to earn more points from credit cards? – June 2025 update
If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.
In 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.
You qualify for the bonus on these cards even if you have a British Airways American Express card:
Barclaycard Avios Plus Mastercard
Get 25,000 Avios for signing up and an upgrade voucher at £10,000 Read our full review
Barclaycard Avios Mastercard
Get 5,000 Avios for signing up and an upgrade voucher at £20,000 Read our full review
You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.
SPECIAL OFFER: Until 15th July 2025, the sign-up bonus on the Marriott Bonvoy American Express Card is TRIPLED to 60,000 Marriott Bonvoy points. This would convert into 25,000 Avios or into 40 other airline schemes. It would also get you at least £300 of Marriott hotel stays based on our 0.5p per point low-end valuation. Other T&C apply and remain unchanged. Click here for our full card review and click here to apply.
SPECIAL OFFER: Until 14th August 2025, the sign-up bonus on the Hilton Honors Plus debit card is TRIPLED to 30,000 Hilton Honors points. You will also receive Gold Elite status in Hilton Honors for as long as you hold the card. Click here for our full card review and click here to apply.
American Express Preferred Rewards Gold Credit Card
Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review
British Airways American Express Premium Plus Card
30,000 Avios and the famous annual Companion Voucher voucher Read our full review
The Platinum Card from American Express
50,000 bonus points and great travel benefits – for a large fee Read our full review
Virgin Atlantic Reward+ Mastercard
18,000 bonus points and 1.5 points for every £1 you spend Read our full review
Earning miles and points from small business cards
If you are a sole trader or run a small company, you may also want to check out these offers:
The American Express Business Platinum Card
50,000 points when you sign-up and an annual £200 Amex Travel credit Read our full review
The American Express Business Gold Card
20,000 points sign-up bonus and FREE for a year Read our full review
Capital on Tap Pro Visa
10,500 points (=10,500 Avios) plus good benefits Read our full review
Capital on Tap Visa
NO annual fee, NO FX fees and points worth 0.8 Avios per £1 Read our full review
British Airways American Express Accelerating Business Card
30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
Bob 
Neil 
Nathan 
Genghis 
rams1981 
harry 
BLT 
Alan 
Mr Dee 
Mike 
Greg 
Rob 
Nick 
smellyden 
MIM 
Edward 
Comments (57)