It says a lot about the spending and travel habits of Head for Points readers that I think I can safely say, without fear of contradiction, that at least 50% of our readers will currently be expecting an American Express refund for a cancelled flight.
An email from a reader yesterday reminded me that you may not be familiar with how American Express treats refunds when you have a spend target to hit.
The answer is simple: all American Express spend targets are based on NET spend, not GROSS spend. Your spending is adjusted for refunds, irrespective of when the original transaction took place.
I am a good example of this.
My British Airways American Express Premium Plus membership year runs to late February. I need to spend £10,000 between late February 2020 and late February 2021 to receive my next 2-4-1 Avios companion voucher.
However, I am currently due a £2,000 refund from British Airways.
When this refund turns up, it counts against my target spend. This means that I will need to spend £12,000 this year – not £10,000 – in order to trigger my 2-4-1 voucher.
It makes no difference that the original purchase took place in my old membership year. Amex deducts the £2,000 from my gross spending in this membership year so, to hit £10,000 of net spend, I now need to hit £12,000 of gross spend.
The identical situation applies if you are working towards any other American Express spend bonuses:
Any sign-up bonus on any American Express card
10,000 Membership Rewards points for spending £15,000 in a year on American Express Preferred Rewards Gold
Marriott Bonvoy Gold Elite status for spending £15,000 in a year on the Marriott Bonvoy American Express
A 25,000 point free night voucher for spending £25,000 in a year on the Marriott Bonvoy American Express
Does this apply to other card issuers too?
I don’t know, unfortunately. It will vary on a case by case basis, but you should assume any award is based on net spend and not gross spend.
This would include:
A free night for spending £10,000 in a year on the IHG Rewards Club Premium Mastercard (which was pulled from the market last week)
40,000 HSBC points for spending £12,000 in your first year of holding the HSBC Premier World Elite Mastercard
An upgrade or 2-4-1 voucher for spending £20,000 in a year on the Virgin Atlantic Reward Mastercard
An upgrade or 2-4-1 voucher for spending £10,000 in a year on the Virgin Atlantic Reward+ Mastercard
Luckily for me, a Virgin Atlantic refund which is also coming my way will be heading back to my MBNA Horizon cashback card (not available to new applicants). This is the only 0% FX card that I hold and the taxes were paid in US$. I do still need to find another £2,000 now to put through my British Airways Premium Plus card.
PS. A few readers have asked me if American Express is likely to reduce the £10,000 or £20,000 spend target on the British Airways credit card to trigger the 2-4-1 voucher. I haven’t seen any movement on this so far unfortunately.
Remember that if you have the free British Airways credit card, one option is to upgrade to the Premium Plus version which has the lower £10,000 spending target. If you have already spent £10,000 in the current card year on your free BA Amex card, your 2-4-1 voucher is triggered immediately on upgrading. If you haven’t already hit £10,000, your voucher will be triggered as soon as you do.
You can downgrade to the free card again as soon as you have your voucher in your Executive Club account. The annual fee on Premium Plus is refunded pro-rata, so your net cost is only £16.25 (£195/12) per month.
There is no formal upgrade process. You simply apply online for the BA Premium Plus card here. Your existing free BA Amex is automatically cancelled and your existing membership year and spending to date target is carried over. You don’t, obviously, qualify for the 25,000 Avios sign-up bonus on the Premium Plus card as an upgrader.
PS. If you have cancelled a card that is due for a refund you should get in touch with Amex to request a transfer of the refunded money.
Want to earn more points from credit cards? – January 2021 update
If you are looking to apply for a new credit or charge card, here are our January 2021 recommendations based on the current sign-up bonus.
British Airways American Express
5,000 Avios for signing up, no annual fee and a companion voucher for spending £20,000 Read our full review
British Airways American Express Premium Plus
25,000 Avios and the UK’s most valuable credit card perk – the 2-4-1 companion voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review
The Platinum Card from American Express
30,000 points and an unbeatable set of travel benefits – for a fee Read our full review
Virgin Atlantic Reward+ Mastercard
15,000 points bonus and the most generous non-Amex for day to day spending 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:
American Express Business Gold
20,000 points sign-up bonus and free for a year Read our full review
American Express Business Platinum
40,000 points sign-up bonus and a long list of travel benefits Read our full review
British Airways Accelerating Business American Express
Earn both Avios and BA On Business points with your business spending Read our full review
Capital On Tap Business Rewards Visa
The most generous Avios Visa or Mastercard for a limited company Read our full review
Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history. By recommending credit cards on this site, I am – technically – acting as a credit broker. Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.