May 2, 2007

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  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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