Morgan Stanley introduces annual fee on credit card

In 2006 financial regulators in the UK carried out an in-depth review of penalty charges being imposed by credit card companies to customers that exceeded their credit card limit and for those that were late in making a payment on their card. As a result of this the ceiling limit placed on penalty charges on credit cards was capped at £12, whereas many card companies had been charging £20 or more previously. Clearly this meant a huge loss in revenue for many credit card companies, and as a result these card companies have introduced a variety of new strategies to help them to recoup the costs in other ways.

It seems that Morgan Stanley is the latest card issuer to jump on the bandwagon of finding ways to recoup lost income, and has introduced an annual fee for users of its Black credit card. Cardholders will now be charged a £20 annual fee for the privilege of having the credit card, which has left many loyal card users and customers unhappy.

The Black credit card is generally offered to customers that do not qualify for the Platinum card, and although it is a cash back credit card the cash back for most consumers will be eaten up by the annual fee that is charged, thus offsetting any benefit that the card offers.

One annoyed Black cardholder stated: 'I spend around £300 a month on the card and clear the balance by direct debit at the end of each month. I've never missed a payment and I suppose I'm one of those customers that doesn't actually make the credit card company any money. I liked the cashback aspect of the card, but this fee doesn't make it worthwhile now.'

Tom Smith
9th May 2007