Canceling Credit Cards: Will I Get My Annual Fee Back? (2024)

Usually, yes—many card issuers will refund an annual fee if you close the account and request a refund quickly enough. You usually have about 30 days after an annual fee is incurred—sometimes more, sometimes less. It varies highly by issuer and is not always guaranteed. Only your card issuer will be able to tell you for sure.

Credit cardholders should periodically go through their portfolio of credit cards and decide which ones to keep and, perhaps more importantly, which ones to cancel. The card with the handsome welcome bonus might not be so appealing when the annual fee comes due. Because card issuers often change benefits, cards may become less useful or no longer relevant to your spending patterns in terms of rewards offered.

There are many things to consider before canceling a card, but once you’ve decided to pull the trigger, it’s important to do so at the right time. If you’re canceling a card, you’ll want to avoid paying the annual fee if possible.

But what if it’s already posted to your account? Can you still cancel the card and have the fee returned?

We explored the murky territory of annual fee refunds and have compiled a list of the most popular credit card issuers’ policies, as well as some tips to help you evaluate if and when you should cancel a credit card.

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Should You Cancel Unused Credit Cards or Keep Them?

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Editorial Review

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• Foreign transaction fee
• Ongoing balance transfer fee is high
• Requires a companion card to transfer points to travel partners

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Credit Score ranges are based on FICO® credit scoring. This is just one scoring method and a credit card issuer may use another method when considering your application. These are provided as guidelines only and approval is not guaranteed.

Should I Cancel My Credit Card?

There’s no one-size-fits-all solution when it comes to credit cards and it’s best to assess your needs on a case by case basis. In general, it’s better to keep credit card accounts open—even ones you aren’t using.

Canceling a credit card can negatively impact your credit score—but this doesn’t mean you shouldn’t cancel a card if the benefits don’t outweigh the annual fee. For those who cannot resist overspending, often miss payments or remain at risk of falling into heavy debt, it may be necessary to close the account to preserve overall financial health.

Divorce can, in many cases, necessitate the termination of joint accounts as well. Likewise, retail credit cards from establishments you no longer frequent may be worth canceling. A shift in lifestyle can also mean premium credit cards with high annual fees no longer make sense.

When To Cancel a Card

It’s generally not necessary to cancel a credit card before the annual fee comes due, which is typically at the anniversary of account opening. If a card has an annual fee, you’ll pay it at the beginning of your cardmember year and have all of the relevant benefits for the rest of that year. Canceling the card before the year is up means you’re missing out on perks for which you’ve already paid.

Some card issuers even explicitly advise against doing this. For example, you will find the following in the terms and conditions for some American Express cards:

“If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome bonus offer in any way, or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome bonus offer (s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the threshold amount), we may not credit Membership Rewards points to, we may freeze Membership Rewards points credited to, or we may take away Membership Rewards points from your account. We may also cancel this Card account and other Card accounts you may have with us.”

What To Do Before Canceling a Card

There are several things you should do before canceling a credit card. Among them are collecting any cards from authorized users, canceling any recurring charges and moving available credit to another account.

Also make sure you won’t lose any miles, points or rewards you’ve earned with the card. Stipulations regarding forfeiture of points vary by card and card issuer. A good rule of thumb is that if you’re earning airline miles or hotel points on a co-branded credit card—like the The World of Hyatt Credit Card for example—the miles and points will be safe in your airline or hotel rewards account. On the other hand, if you’re earning bank-specific rewards, such as Chase Ultimate Rewards® or American Express Membership Rewards, there is a risk of losing them. Different lenders have different policies:

• American Express: You have one Membership Rewards account for all of your Membership Rewards-earning cards. As long as you retain at least one of these cards, you can close the others without losing your Membership Rewards.
• Chase Ultimate Rewards®: These are tied to specific cards, but they can be transferred to another Ultimate Reward-earning card. As long as you transfer them to one of your other Chase Ultimate Rewards® cards (such as the Chase Freedom Unlimited®), they will be safe.
• Citi’s ThankYou points: These may be transferred, but this doesn’t prevent them from expiring. You’ll have 90 days to use them after closing the card or if you share them with another user.

If you don’t have another card to transfer your flexible rewards to, you should choose which airline or hotel partner is the best for your upcoming travel needs and transfer your points there.

How To Cancel Your Credit Card Without Hurting Your Score

Canceling credit cards can hurt your credit score, so it’s important to close your accounts in a way that carefully mitigates this damage. The first and most important step is to pay off or at least transfer any outstanding balance. You will not be able to fully close a card when debt remains outstanding. Even if your balance is zero, it’s still a good idea to wait one more month to ensure there aren’t any last minute charges you forgot about. Don’t forget to spend any rewards you might have accrued—these may disappear once the card is closed.

Next, you’ll want to contact your issuer, confirm your account balance is zero and inform of your desire to close your account. Your issuer will in all likelihood pressure you to keep your account open. Some may even offer you incentives to keep your account open. So long as you are insistent, an issuer will close your account. Be sure to get a record of the account closure, either via email or letter.

Check your credit report regularly: after about a month, you should see the account either removed or marked as closed upon customer request. Dispute any incorrect information you find as soon as possible. Lastly, you’ll want to destroy the physical card. Even though an account may be closed, identity theft can still be possible if the wrong person finds your card.

Final Considerations Before Canceling a Credit Card

Before canceling a card, it may be worth calling the issuer to see if it will extend you a retention offer. Banks know it’s much easier and cheaper to keep an existing customer than to acquire a new one, so in some cases an issuer might provide a statement credit or issue a spending challenge (earn extra points by spending $X).

One last consideration involves your credit score. If the card you’re about to cancel happens to be the one you’ve held the longest, you may want to see if it’s feasible to keep it instead. Length of credit history accounts for a part of your credit scoreand credit utilization matters even more. It may make more sense to downgrade a card to one without an annual fee.

Annual Fee Refund Policies By Credit Card Issuer

We’ve arrived at the pièce de résistance. You’ve decided to cancel your card, but how long after the annual fee hits do you have to get it refunded? We reached out to these major credit card issuers to learn about each one’s policies.

American Express

American Express will refund the annual fee on a card if you cancel it within 30 days of the closing date of the billing statement on which the fee appears. Beyond that period, a refund is not possible.

Bank of America

According to a Bank of America representative, no set policy exists. If you’d like a refund, you can request one when closing your account or changing products and they will consider your request on a case-by-case basis.

Barclays

Barclays will issue a refund of the annual fee on a case-by-case basis. According to a Barclays rep, typically if a request is made to close the account within a short period of time after opening the account, paying the annual fee and not taking advantage of the benefits tied to the annual fee, as a courtesy they will refund the fee.

Capital One

According to a representative from Capital One, your annual fee will be refunded if you call to cancel within 30 days of the date of the statement that includes it.

Chase

A Chase representative confirmed to Forbes Advisor that if a cardholder cancels within 30 days of the date of the statement that includes the annual fee Chase will issue a refund.

Citi

Citi responded to our inquiry saying a refund will be granted if you notify them of account closure within 37 days of the fee being billed.

U.S. Bank

With U.S. Bank, if an annual fee was billed during the previous cycle, it automatically gets refunded when the card is closed. Outside that time frame, there are different policies for personal and business accounts. For personal accounts, no refund will be issued. For business accounts, however, a refund is theoretically possible at any time; it’s entirely up to how convincing your argument is.

Bottom Line

Now that you know the rules, you can confidently make decisions regarding your accounts, and ensure you’re not paying fees for any cards you don’t intend to use. As long as you have considered your options and take the proper steps, you can cancel any card with confidence.