27 February 2007
Morgan Stanley, one of the largest credit card providers, has announced that its customers will now have to pay a 3% fee on every purchase when using their credit cards abroad in addition to a 6% increase in the cost of cash withdrawals as of April 24th.
It's not just Morgan Stanley's 1.5 million customers who will be affected by the credit company's move as many high street lenders are looking into how to follow in the bank's footsteps, according to a report in the Evening Standard.
All credit card transactions abroad currently have a transfer fee attached to them, though many consumers are unaware of this as it is usually disguised as a poor exchange rate on their statements.
Eddy Weatherill of the Independent Banking Advisory Service told the Evening Standard that this was yet another way that banks and lenders were attempting to claw back their revenue following the Office of Fair Trading's (OFT's) clamp down on sky high fees.
"We are seeing extra charges being heaped on the cost of using a card overseas. But that is just one of a series of stealth charges," he added.
Nick White, Head of Personal Finance at the price comparison and switching website uSwitch.com, commented: "This will certainly open the floodgates for other credit card providers that are still desperately trying to claw back the lost revenue following the OFT's reduction of penalty charges."
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