Back in 2016, American Express stopped prorating the annual fee when you cancel a card in middle of the card-year. Product changes, however, still get the fee prorated. This leaves the option of downgrading a card no longer needed in order to get the desired prorate.
I recently noticed an interesting discrepancy between upgrading an Amex card versus downgrading. When upgrading a Green card to Platinum last year, Amex did not process the prorate until my renewal date a few weeks later, so as to round off the Platinum cost into monthly fee blocks.
For example, the personal Platinum card annual fee is $550, which breaks down to $45.83 per month. When upgrading to the Platinum card, they’ll wait until the date in the month when your annual fee was changed, and then prorate the fee monthly. If there are 2.5 months left to the year, they’ll wait until the 2-month mark, and charge you $91.66 (two months @ $45.83 per month). [At the same time, they’ll give you a prorated refund for the 2 months remaining on the Green card. The annual fee there is $95, so you’ll get $15.82 (2 x $7.91) back.]
The product change will process immediately, and you’ll get a mail confirming of the change occurring on the date you called in, but there’s no extra charge for that half-month, just the regular Green cost you were paying until now.
Conversely, when I recently downgraded a Platinum card to Green, I got a prorate for the rest of the year to the day. On my Amex statement, it shows the prorate based on the exact day I called in to downgrade the card. [At the same time, the prorated fee on the Green card posted to my Amex account, charging me for the rest of the year from that day forward.]
In the case of the upgrade, Amex rounds everything off to the coming month, whereas in the case in the downgrade, they’ll give you back credit to the day. This creates a bit of an opportunity to ‘hack’ a month of extra Platinum (or other card) with no fee if you are going through with an upgrade: time your upgrade to be one day after your renewal date-of-the-month to do the upgrade.
For example, if you were charged an annual fee on a Green card on February 10th, and it’s now September 4th and you want to upgrade the Green to Platinum, wait until September 11th to process the upgrade and you’ll save yourself almost $40 since you’ll get all Platinum benefits immediately, but you won’t pay any Platinum fee until October 10th. Hopefully this makes sense.
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DP: Saks offer didn't post after canceling the card. Long story short, CS said that according to the terms, that's the way it supposed to be
Thanks for this post. Have the BCP that I want to get rid of, August was the renewal date. The benefit changes make this card less desirable (and I already capped out the 6K in groceries). Now I know I can get a partial refund if I downgrade back to the BC.
It is good to understand that if you pc for an upgrade offer, like the recent 50K MR for $10K spend, that your bonus will credit within days of completing the spend, not after the statement cycle like some other credit cards. Some of the points n that spend will take longer to finalize. So you may want to keep the card until all your points credit and downgrade after that. Still, the important point is that you do not need to wait until the statement cycle and can downgrade on the day you prefer and make this "micro hack" work :)
Thank you for this info! Doing an upgrade/downgrade myself.
Is this possible not played with Upgrading/downgrading - but looking to now.
Even tho tripple dipping airline GC is dead now, could one Theoretically upgrade Per Gold to Plat in Dec. (if you did'nt use airline credits). Upgrade then Triple dip and downgrade in Jan 2021 after Triple Dip credit?
DP: Literally just got off the phone with CS to close my gold card. Rep had told me last month that they WILL prorate at cancel if you ask, so long as you have OTHER Amex cards open. It can’t be your only card. She encouraged me to wait until my ~6,000 membership rewards points from the last statement hit before canceling. Sure enough, they just closed the card and prorated the refund for the remaining 10 months on the account.
She was adamant that you have to specifically request this, however.
@guest_806103 Is your billing address in Massachusetts, by any chance? They have different laws there than other places.
Nope, KY. Pretty sure we have some of the lowest consumer protections laws in the country, ha! The rep basically said, "I understand your concern about getting the annual fee refunded past the 30 day window, but this is an official Amex policy; I've worked here for years..."
Again key points: must have other Amex card(s), and must request the proration at time of cancelation. During the cancelation process the rep did put me on hold to request/process the proration request, which took a few extra minutes.
As far as I know, with in 30 days you will get back full refund of annual fee if you cancel the card, or downgrade. But at or after 31 days you will not get any portion of your annual fee if you cancel the card, and you will still get prorated refund if you down grade.
Just downgraded my Blue Cash Preferred the day after the $95 fee hit. I was credited for 364 days of the membership fee, $94.74.
Appreciate your accurate reporting, as 26 cents is indeed the result of dividing $95 by 365. I’ll gladly give AMEX their 26 cents next month one day after the fee hits if it puts me in the clear with all I’ve earned on my BCP upgrade this past year.
I’d be careful messing around with Amex. The same people doing it are the ones who will cry when their account is closed and points forfeited.
So I just realized that my Amex Gold card $195 annual fee was billed 7/26, but I didn't plan to keep this card! It's now 9/4, so will I not be able to get the AF refunded by canceling?
If not, will I be able to get it partially refunded by downgrading?
And since it's a charge card, is my only option to downgrade to the Green card (which still has a $95 AF? :( Thanks!
Best you can do is downgrade to Green and get a partial refund.
At a $195 AF I would keep that and use up the $10/month grubhub benefits along with 4x on dining and grocery, you can always call and ask for an AF refund and explain it was a mistake, they are sometimes forgiving on this even months later, especially if you haven't been using the card
Nope. Yes.
Called to downgrade my ascend (now surpass)a few weeks ago, on the account anniversary to the no AF card, already have the aspire. They wanted to give me only $87.03 back. But if I closed it I would get a full refund. Ended up closing it and will be getting the No AF with the bonus instead.
This makes sense based on the rules they have- for cancellations, if it's within 30 days, you get a full refund, they have to do this because of the CARD Act like all issuers. But for downgrades, it's prorated no matter when you do it, so they were only going to give you 11 months worth back. So within 30 days closing is better, any other time downgrading is (since closing gets you nothing back at all.) But I agree that in your case, it works out a bit silly from their perspective, since they're effectively incentivizing closing. I wonder if a representative who realized this would have the ability to manually give the full refund upon downgrading?
Sameish. I pushed the issue, being within 30 days, and they gave me the full AF refund. They have the power. :-)
I assume you are within 30 days? That's right, if you downgrade within 30 days you lose a bit versus closing.