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Update: As of September 1, 2016, Amex is reducing the annual fee cancellation grace period from 90 to 30 days.
TPG reader Arlyn sent me a message on Facebook to ask about annual fees:
“If I get the Citi Prestige card, when will I be charged for the annual fee?”
Most of the top rewards credit cards carry an annual fee, which is an important consideration when you’re applying for a new card or deciding whether to keep one you already have. Many cards come with annual bonuses and benefits that offset the annual fee, but it should still factor into your analysis of which cards offer the best value. Knowing when annual fees are charged can help you budget for the cards you want, as well as help to avoid paying for the ones you don’t.
The Citi Prestige Card has a $450 annual fee; that price tag is on the high side, but it’s about average for a premium card and well worth it thanks to the impressive suite of benefits. The annual fee gets charged immediately when your account is opened. The full amount will be applied to your first statement and will be due along with any other charges you make during that period. That’s generally the case for any card that doesn’t waive the annual fee in the first year, whether it’s from Citi or otherwise.
Beyond the first year, Citi charges your annual fee on the statement following your account anniversary. However, you can cancel the card within 37 days of when the fee is billed for a full refund. If you cancel beyond that date, then the fee is prorated and you can get a refund for the unused portion all the way through your next account anniversary. That applies to all Citi personal cards, not just Citi Prestige.
These policies differ somewhat from one card issuer to another. Chase charges annual fees on the first of the month after your account anniversary — for example, if your account was opened on June 15, the fee will be charged on July 1. You get 60 days from when the fee is billed to get a full refund, and you can get a prorated refund up to six months beyond the billing date. As of September 1, 2016, you only have 30 days to cancel an Amex card for a full refund — these fees are billed on the anniversary date itself. Amex also no longer prorates this fee if you cancel after 30 days.
One important note about Citi Prestige is that the $250 annual travel credit applies to the calendar year and not the cardmember year. You can use that credit to cover just about any charge processed by an airline, including airfare. You have until your December billing statement to use it, after which you’ll get another credit for the following year. That means you can pretty easily score two credits ($500 total) during your first year of having the card, while paying just a single $450 annual fee. If you do decide to cancel after that, at least you’ll have gotten your money’s worth.
For more information on Citi Prestige and annual fees in general, check out these posts:
- How I’ve Gotten $2,250 in Value from the Citi Prestige Card
- Strategies for Minimizing Credit Card Annual Fees
- Travel Rewards Credit Cards with No Annual Fee
- What is the Best Rewards Card with No Annual Fee?
Chase Sapphire Preferred® Card
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|N/A||16.24%-23.24% Variable||Introductory Annual Fee of $0 the first year, then $95||0%||Excellent Credit|