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TPG reader question: Do I have to pay the annual fee if I use my card benefits and decide to cancel?

Dec. 07, 2020
5 min read
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Editor’s note: This article is part of a column to answer your burning credit card questions. If you would like to ask us a question, tweet us at @thepointsguy, message us on Facebook or email us at

Credit card strategies shift every year. But in 2020, they've changed like no other year before.

Issuers have had to pivot and innovate as consumers substituted travel spending for at-home essentials like groceries or streaming. With fewer people traveling, one of the biggest questions of the year for TPG has been whether to keep, cancel or downgrade annual-fee cards.

While retention offers and limited-time benefits may be enough for some to hold onto a card for another year, others may simply find that it isn't worth it anymore. If you are in the latter camp -- and considering downgrading or canceling in 2021 -- here's a word of advice. You should still make use of your card's perks before making any moves with your issuer.

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Here's what TPG reader Greg M. wants to know as he evaluates closing his American Express® Gold Card.

[pullquote source="- Greg M., TPG reader"]I'm interested in the Amex Platinum card's latest welcome bonus but also plan to cancel my Amex Gold. I love the card but I can't justify having both the Gold and Platinum. If I were to cancel the Gold in early 2021, can I still use its benefits (such as the $100 airline fee credit) and not pay the annual fee that year?[/pullquote]

The short answer: yes, in most cases. Let's take a closer look at Greg's situation.

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Applying for the Platinum

For Greg and many others, it may be hard to justify paying the annual fee for both the $695-per-year The Platinum Card® from American Express (see rates & fees) as well as the $250-per-year Amex Gold Card (see rates & fees).

With the Platinum card, Greg wants to take advantage of one of the best welcome offers we've ever seen on this premium travel card: 100,000 Membership Rewards points after spending $6,000 in your first six months of card membership.

Related: Why I'm keeping my Amex Platinum even though I'm traveling less

The Amex Gold has a stellar -- and permanent -- 4x bonus at U.S. supermarkets (up to $25,000 in purchases per calendar year, then 1x). However, Greg would rather have the Amex Platinum in 2021 over the Amex Gold, thanks to the Platinum's generous welcome offer. In the future, he could always downgrade to the Gold card if he found the Platinum's annual fee to be too onerous.

Note that in most cases, we wouldn't recommend product changing from one Amex card to another since you won't be able to qualify for the welcome offer in the future.

Related: Amex Gold or Amex Platinum: Which card is better for groceries long-term?

Canceling the Gold

The crux of Greg's question is whether he can still take advantage of the Amex Gold card's benefits in 2021 before he cancels without paying the annual fee. And the answer is yes, in most cases, you should be able to. However, know that with the Gold or any other card, you should avoid canceling before the one-year mark.

Card issuers don't like when you open credit cards just to score a sign-up bonus and don't turn into valuable customers. In some cases, they could claw back welcome offers and take other punitive action.

Related: Amex Clawed Back My Welcome Bonus — Reader Mistake Story

Here are the Gold card's credits:

  • Up to $120 annual dining credit. Earn up to $10 in statement credits monthly when you pay with the Gold Card at participating dining partners
  • Up to $100 airline fee credit (this is ending in 2021)
  • Up to $120 annually ($10 credit per month) in Uber Cash, which can be used on Uber Eats orders or Uber rides in the U.S. (starting in early 2021). The card must be added to the Uber app to receive the Uber Cash benefit.

Before Greg cancels his card sometime in early 2021, he should certainly take advantage of the first two credits (and the third, depending on when it launches). However, know that you will only have up to 30 days after the annual fee is billed to cancel the card and have the annual fee reversed. Amex no longer allows prorated refunds of the annual fee, either.

Related: Who should (and who shouldn’t) get the Amex Gold card?

Bottom line

Ultimately, if you're deciding to cancel a card, call up the issuer to see if there's a retention offer such as a statement credit, a partial or fully waived annual fee or bonus points. If you do elect to cancel, use the benefits of the card before making a final decision. For Greg, he can -- and should -- make use of the Amex Gold's perks before canceling sometime in 2021.

Related: My Amex Platinum retention bonus: 20,000 Membership Rewards points

For rates and fees of the Amex Platinum, please click here.
For rates and fees of the Amex Gold, please click here.

Featured image by (Photo by Eric Helgas/The Points Guy)
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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