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May 2, 2007
NEWS: Morgan Stanley Institutes Fee
Some British Morgan Stanley Black
cash back rewards cardholders are now going to
face a £20 annual fee. Morgan Stanley, the
banking giant with the major foothold in both
U.S. and British credit card markets, claims
that not all Black cardholders – those declined
for one of the more prestigious and elite
Platinum cards – will face the fee, but would
not say exactly what criteria would be required
to avoid the fee. All the bank would say was
that Morgan Stanley had reviewed the “spending
patterns and repayment history” of its consumer
card customers, and would be assessing the fee
on a “number” of its customers. (Which
intuitively seems to suggest that those not
carrying a balance from month to month or those
maxing out their cards and/or becoming
delinquent will be among those targeted by the
new annual fee.)
As it is, the Black card does not offer cashback
benefits to those consumers spending less than
£2,000 annually. The new fee will be instituted
June 1, leaving those who wish to jump ship only
a small window of time in which to sign up with
a new card issuer.
Morgan Stanley’s new fee is the latest among
British plastic intended, at least in part, to
penalize those consumers who don’t make the
issuer enough in interest and fees by not
carrying over a balance. Competitor Lloyds TSB,
for instance, has introduced a £35 fee for low
usage on their cards. There are those critics
who think that the new crop of fees are a
retaliatory measure by the companies to
counteract the OFC’s limitation of exorbitant
late fees passed last year.
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