A debit card that offers $550 per year in rewards


a close-up of a credit card

Earlier today I published a method for getting the Morgan Stanley Platinum card for free.  More specifically, the post detailed how to earn the Morgan Stanley $550 Annual Engagement Bonus.  This relationship bonus perfectly offsets the Morgan Stanley Platinum Card’s annual fee.  It appears, though, that you can earn the same $550 each year even if you don’t have a Platinum card.

As a reminder, one of the steps involved in earning the $550 Annual Engagement Bonus is to open a Morgan Stanley Platinum CashPlus Account.  I dug into the CashPlus account disclosure statement and found that you don’t actually need a Platinum card to earn $550 per year.  Another option is to spend $100K on one or more debit cards that come with the account.

The bottom of page 6 in the disclosure statement is the start of the section that details requirements for the Annual Engagement Bonus. On page 7 you’ll find the part that I found particularly interesting with the heading “If you have a Morgan Stanley Debit Card issued in connection with your Platinum CashPlus Account:

• You must be the Morgan Stanley Debit Card holder and your Morgan Stanley Debit Card must be active at the time the Annual Engagement Bonus is paid.
• There is a total spend requirement of at least $100,000 (“Total Spend”) on one or more Morgan Stanley Debit Cards in your name. Total Spend can be in a single eligible Platinum CashPlus Account or aggregated across more than one Platinum CashPlus Account within your ALG, however, Total Spend will be calculated only on Morgan Stanley Debit Cards in your name.
• Total Spend does not include certain fees such as ATM fees, Foreign Exchange fees, ATM withdrawals, cash advances, amounts subject to chargebacks, or purchases of any cash equivalents (such as gift cards, travelers checks, money orders, etc.).
• Total spend includes all settled eligible purchases on debit cards, in your name, during a calendar year based upon the Platinum CashPlus Accounts in your ALG. To be included in Total Spend calculation, a Platinum CashPlus Account must remain open as of December 31st and must be open at the time of the Annual Engagement Bonus is being paid.
• The Annual Engagement Bonus will typically be paid in January of the calendar year following the year in which the aggregate Morgan Stanley Debit Card Total Spend occurred.

Why this may be interesting… or not

Very few debit cards in the US offer meaningful rewards for debit spend.  However, if you have (or get) a Morgan Stanley Platinum CashPlus Account, you can earn $550 each year with $100K of debit spend.  The terms exclude purchases of cash equivalents, but I bet that many options for increasing debit spend would count towards the required $100K.

Things get less interesting when you realize that $550 is only 0.55% of $100,000.  And it gets worse when you consider the costs associated with qualifying for this relationship bonus:

  • Access Investing account annual fee: 0.35% = $17.50 per year if you maintain exactly $5,000 in that account.  Let’s round up and call this $20 per year.
  • Cost of money for keeping $25K in the Platinum CashPlus Account.  Compared to Citi’s high yield Accelerate Savings account, which currently earns 1.35%, the Morgan Stanley account earns more than 1.3% less.  By keeping $25K in the CashPlus account instead of the Citi account, you lose 1.3% of $25K = $325.

Total estimated cost: $345 per year.  If you accept that cost estimate, then the earnings on spend with this debit card drop to $550 – $345 = $205 per year.  That’s only about one fifth of one percent back on your $100K spend.

CashPlus Account Disclosure Statement PDF

Click to access cashplusaccountdisclosurestatement.pdf

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“Another option,” as you write. It’s important to realize that you can’t get both an engagement bonus for debit spend and the one for just having the Amex Plat with a CashPlus account. There’s also a $500 bonus for putting $100k on the Amex that you can get in addition, but I wouldn’t recommend chasing that either, unless you’re already putting $50k+ In airfare on the Platinum. These are interesting and I appreciate the article, but practically, anyone who can legitimately put $100k on a debit card, even doing something like paying taxes, can more easily just meet the $5k/25k deposit requirements.


Disclaimer: I don’t have any Morgan Stanley account, so this is just based on a read of their terms.

This debit card deal may be even worse than being 1/5th of one percent. From the terms, it looks like the Annual Engagement Bonus doesn’t trigger a 1099 for that amount, as long as there is spending of at least $1K on the Platinum card in the same calendar year. This seems to suggest that the Engagement Bonus is treated by Morgan Stanley as a rebate (just like credit card rewards and fee waivers) rather than income if there is that minimum spend. However, this does not appear to be true for the debit card unless I missed something (there is just the standard boilerplate to consult your tax advisor for all other circumstances). Or is it because the minimum spend is built into the condition for the bonus? It is odd that they leave it out when specifically calling out the lack of 1099 for bonus on Platinum cards. So I think it is likely that the Annual Engagement Bonus is indeed considered income in the case of debit card spend (just like most bank accounts don’t rebate debit card spend), so the entire $550 would be taxable, which would even wipe out most, if not all of the hypothetical $205 gain on a $100K spend that you calculated.