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This is what happens on 29th February with American Express pro-rata fee refunds

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American Express has traditionally offered one feature which other UK credit card companies did not.

If you took out a card with an upfront annual fee, you would receive a pro-rata fee refund if you cancelled your card part-way through the year.

Amex decided to stop pro-rata fee refunds on 2nd October 2023. At the last minute it had a change of heart, and announced that refunds would still be available until at least 29th February 2024.

So …. what happens next?

American Express pro-rata fee refunds ending in UK 2024

I have been speaking to American Express this week and it has issued this statement:

Pro-rata refunds on credit cards will be removed later in the year. We will provide a firm date in due course.

This may seem a bit too short and sweet, but it actually tells you everything you need to know:

Message 1 – nothing changes on 29th February

You don’t need to worry about cancelling any American Express cards by 29th February. Whilst 1st March was the earliest date that Amex said it MAY remove pro-rata refunds, this is not going to happen.

You are OK until ‘later in the year’.

Message 2 – notice will be given that pro-rata refunds are ending

When Amex does finally decide on a date, notice will be given. You will have time to cancel any cards which you do not wish to retain for the rest of their card year.

Now …. it’s not clear HOW this notice will be given. It is possible that it is only given via HfP and via a message somewhere on the Amex website.

Amex may not need to formally notify cardholders, because I don’t think cardholders were ever told that the original end date of 2nd October 2023 had been scrapped.

Will fee refunds will be scrapped on all American Express cards?

No.

The change only impacts personal and business credit cards.

If you still hold a charge card – although all personal charge cards have been withdrawn from the market over the last couple of years for new applicants – then nothing changes. You will still be able to cancel it at any point for a pro-rata fee refund.

American Express pro-rata fee refunds ending in UK 2024

What happens if American Express cancels your card?

You will still receive a pro-rata fee refund if your card is cancelled by American Express for any reason.

How will the end of pro-rata refunds change the card market?

That’s a good question, especially as you also need to factor in the appeal of competing products – the Barclaycard Avios Plus Mastercard, for example, has a fee of £20 per month and so can be cancelled at any time without penalty.

Let’s look at a few of the cards:

American Express Preferred Rewards Gold

American Express Preferred Rewards Gold is free for the first year, so the appeal of this card (you currently receive 20,000 Membership Rewards points bonus, £120 of Deliveroo credit and four airport lounge passes) is unchanged.

The Platinum Card from American Express

The Platinum Card is more complex, but even at a non-refundable £650 for the first year it would remain a good proposition (40,000 Membership Rewards points bonus, £300 of dining credit in your first calendar year, £300 of dining credit in your second calendar year, up to £150 of Harvey Nichols credit across your first 12 months, two Priority Passes, travel insurance etc. This assumes the dining and Harvey Nichols benefits continue beyond 2024.)

During special offers such as the recent 75,000 bonus points promotion it becomes exceptional value for the first year, even at the full £650.

British Airways Premium Plus American Express

The British Airways Premium Plus card becomes less attractive for a quick pump and dump, with the 25,000 Avios bonus equalling but not exceeding the non-refundable £250 annual fee on our valuation.

However, because of the value of the annual 2-4-1 companion voucher, it is by far the most common card for HfP readers to keep for the long term. I doubt many people who read HfP cancel this card quickly.

American Express pro-rata fee refunds ending in UK 2024

Marriott Bonvoy American Express

Most HfP readers who have the Marriott Bonvoy American Express card will have it because of the 15 free elite night credits you receive. This is an annual benefit, and anyone who gets the card purely for the elite nights is probably in it for the long haul. The 15 elite nights even count towards lifetime status.

I have this card purely for the 15 elite nights and have done for a number of years now. I have no plans to cancel it whilst this benefit remains as it makes Platinum Elite status easy to earn.

Is the ending of pro-rata fee refunds even a big deal?

The UK bonus rules will still be more generous than those in the United States, where most American Express cards come with a ‘one bonus per lifetime’ rule. You can’t reapply and get a new bonus after two years, as you can here.

My gut feeling is that American Express will see an improvement in the ‘quality’ of cardholders who sign up for The Platinum Card and – for non-HfP readers who don’t understand the value of the 2-4-1 voucher – the British Airways Premium Plus American Express card.

It remains to be seen if blocking British Airways Premium Plus refunds will make the Barclaycard Avios Plus Mastercard more attractive for people looking for their first Avios credit card.

These changes probably won’t make much difference during special promotions. We have seen offers on the British Airways Premium Plus American Express card and The Platinum Card in the last year which were so generous that, even without a fee refund, they would be no-brainers.

What interests me is whether some people will still choose to cancel their cards quickly even when they don’t get a fee refund. This would make sense in some scenarios, since the quicker you cancel, the quicker the two year clock for reapplying comes around.

There is some upside too. It is possible that American Express will increase sign-up bonuses further on its paid cards once pro-rata fee refunds are no longer available because it knows that cardholders are committed to a full year.

Conclusion

You don’t need to rush to cancel any American Express cards by 29th February.

The company IS still planning to end pro-rata fee refunds later this year, but notice will be given. Keep an eye on HfP so you know when this message is released as you may not otherwise be made aware.

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Category

American Express Gold card, American Express Platinum card, British Airways American Express, Marriott Bonvoy American Express

Comments (97)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • squawk7700 says:
    23 Feb23 February 08:22

    Has anyone discovered hire car insurance as solid as the Amex Platinum version? I’m toying with cancelling as I don’t use the other perks much anymore, however have several holidays this year with hire cars booked and really enjoy the reassurance that the Platinum cover provides.

    • chrisd says:
      23 Feb23 February 08:34

      https://www.insurance4carhire.com/ – i’ve had to make a couple of claims to have the excess repaid when travelling and not had any problems

    • zapato1060 says:
      23 Feb23 February 08:53

      I would say for the sake of £40-50 annual hire cover via moneymaxim. I would cancel Plat. Ive got great first hand experience with companies on there.

    • Chris H says:
      23 Feb23 February 09:17

      I’ve used Questor insurance for many years. They keep giving me loyalty discounts even though I’ve had to claim usually once a year!

  • daveinitalia says:
    23 Feb23 February 08:41

    Nobody has mentioned the curve appears to do pro-rata refunds too. As I’m not getting much benefit from curve I decided to stop my subscription just before it came up for renewal and I got a few quid back even though it was just over a week before my annual fee was taken. If I’d known about the pro-rata I would have cancelled curve a lot earlier.

  • James says:
    23 Feb23 February 09:01

    Am I the only person who pays monthly for platinum? There seems to have been a post-pandemic window it was offered in…

  • Matt says:
    23 Feb23 February 09:11

    Have they mentioned why they’re delaying ending pro rata refunds? If they’re concerned about churning it seems like the obvious thing to do, and having announced it twice I can’t see why they haven’t done it already.

    • Rob says:
      23 Feb23 February 09:52

      The issue seems to be over how they square up changing benefit packages mid-year when you’ve paid your fee already. The FCA may insist that any material change to the card benefits would require cardholders to be given the opportunity to cancel.

      At present it’s not an issue, as Amex’s response to any complaint over benefit changes is that the cardholder can get a refund at any point so they should shut up.

      • Matt says:
        23 Feb23 February 10:03

        Seems like the sort of thing they should have thought about before they announced it!

        Isn’t the obvious solution to implement negative changes at next renewal date?

      • JDB says:
        23 Feb23 February 10:14

        That cannot be the reason as such changes are clearly allowed with two months notice which they duly gave. Of course, at the end of the two month wait they were surprised that a price rise on Gold and Plat was announced! That’s why it was delayed, but why it is further delayed is obviously too secret to share with customers.

        • CJD says:
          23 Feb23 February 10:22

          They’re allowed with two months notice, but the customer also has the right to cancel without penalty if they don’t like the changes.

          If you’re paying an upfront fee for 12 months, then the benefits that come with the card should also be protected for the same 12 months period.

        • TGLoyalty says:
          23 Feb23 February 11:26

          JDB your usual MO … don’t forget the consumer has rights too

          I’m sure 1 issue is IT systems and processes but the other is customer perception. We don’t know how well or badly the change went down when first announced.

          • JDB says:
            23 Feb23 February 11:45

            @TGLoyalty – I am more than aware of consumer rights! You perhaps don’t notice how often I try to provide practical advice to help many people assert such rights.

            I do however, try to provide some balance and perspective when people make ridiculous unthinking comments about commercial organisations who unfortunately treat customers less well than they used to, partly because of customer behaviour.

            In this instance, the statutory protection offered to cardholders is that you are given two months to reflect on any changes and cancel which seems mote than ample.

            I’m not sure how you think this will they/won’t they change to pro-rata refunds and their failure to communicate directly with every cardholder is remotely in the interests of consumers.

        • Jodie says:
          23 Feb23 February 13:18

          Amex have been really clever with this though – a lot of the benefits are not acutally part of the Stated benefits at sign up – they are long term offers.

          The 150 Dining Credits and the Harvey Nichols vouchers are all offers.. so if they do end up going in 2025. Nothing anyone can do really.

          I’m on the fence about cancelling – but i have a charge card so i’ll keep it open a bit longer. Its the insurance that really bothers me – its not a benefit if i have to get additional cover for my very much normal pre-existing illnesses like asthma and none life threatening food allergies – and cruise cover isnt included either.

          • Harrier25 says:
            23 Feb23 February 19:45

            Don’t forget, of you want to personally keep the charge card arena option open you could always downgrade to Green for an annual fee of £60 which keeps the option available to upgrade back to Gold or Platinum charge cards at a later date.

  • jj says:
    23 Feb23 February 09:22

    I welcome the end of pro rata fee refunds. Those of us who hold credit cards for their long-term benefits and have neither the time nor the inclination to continually threaten to cancel, actually cancel, and reapply for peak bonuses cross-subsidise the churners. If Amex moves its marketing focus in favour of long-term, loyal customers, I applaud them.

    But I have to agree with @JDB that Amex needs to spend some management time and hard cash on improving its customer service. There is nothing premium in my perception of the brand.

  • r* says:
    23 Feb23 February 09:54

    Have amex ever given any indication that they are going to review the limited version of the priority pass that they issue that restricts usage of the restaurants?

    Given the price rise of the plat, that cheaper credit cards now give better access and that theres been increase in restaurants at UK airports, its not really good enough to be rejected from a lounge then be unable to use it at a restaurant just because its an amex priority pass.

    • Rob says:
      23 Feb23 February 10:34

      It would absolutely makes sense BUT you need to remember that PP overcrowding is a UK issue and Amex’s PP contract is a global one. I’d be surprised if the UK office even had insight into the deal.

      • LittleNick says:
        23 Feb23 February 12:03

        I thought this was a US issue as well in the sense of US Priority Pass lounges being overcrowded?

  • Jack says:
    23 Feb23 February 10:22

    I recently upgraded to the Premium Plus card to trigger the BA voucher earlier -and for 2 years. Used to be able to track how close I was to triggering the voucher directly n the Amex site, is this now gone? I’m pretty sure I’m past the 10k already but no email. Trying to book a flight asap. Thanks

    • TomB says:
      23 Feb23 February 10:43

      Just chat to them via the website. I just did so now to find out how much spend I had managed towards the £15k tier point offer and they gave me a figure within seconds so I assume they can do the same for the 241 voucher spend. I agree with you though, I think there used to be an easier way of tracking via the app

    • Reeferman says:
      23 Feb23 February 10:44

      It’s still there on mine – under the “Membership” icon at the bottom of the home page

    • Speedbird676 says:
      23 Feb23 February 14:22

      It is still there in the app but seems to have disappeared from the web version.

  • Venturelog says:
    23 Feb23 February 10:44

    I realise I have a very small pool of people to go by, but all are more likely to cancel the BA card after reaching the thresholds. Surely makes more sense? (HFP readers in mind) With MR being more flexible you would be more likely to hold on to them long term and with Avios being used to earn and burn. Is the bulk of HFP audience targeting 241 vouchers every year by holding on to the BA card?

    • Rob says:
      23 Feb23 February 11:00

      As long as you can generate 100k Avios per year to use a 241 voucher for a long haul Business trip (if you’re a couple, harder with kids) and it takes you a fair part of the year to spend £10k, keeping BAPP open makes sense.

      • FatherOfFour says:
        23 Feb23 February 12:30

        For me, I want the benefit of a 241 every 2-3 years or so, when we’ve (re)collected enough Avios and cash as a family in order to use them for a treat holiday. In the “old world”, I’d have had no qualms about downgrading or cancelling between periods where I couldn’t make use of a voucher.

        However, that strategy seems a lot more risky now, so I’m effectively paying £250 for an extra 0.5 avios per pound.

        It would be good if Amex offered an option, like Barclays, to take an Avios alternative to the voucher. (Some might argue this is a retention bonus!)
        I worked out that if I spend exactly 20k on the free Avios Barclaycard in a year and take the 7,000 Avios, I’m getting 1.3 Avios per pound

    • zapato1060 says:
      23 Feb23 February 11:16

      I opened the BAPP, got the 70k and downgraded. Then near enough immediately saw the error in my ways and luckily upgraded a few months after. Its the only card I will hate to lose.

    • Deek says:
      23 Feb23 February 11:31

      My travel is mostly solo long-haul so the 241 is absolutely invaluable, it allows me to travel First & Business when I wouldn’t normally on a cash fare (unless ex-EU) – if I had to choose only 1 card to keep, this is it.

This article is closed to new comments. Feel free to ask your question in the HfP forums.

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