Personal Finance

Credit Card Perks that Honor Active-Duty Military

Originally published on CardRatings.

As a way to say “thank you,” both the country and credit card companies offer special benefits for active-duty military members and, in some cases, their spouses.

No matter your credit card, active-duty military members and their spouses are eligible for benefits related to the Servicemembers Civil Rights Act (SCRA). The SCRA provides financial help to active-duty military personnel and their spouses (more on these benefits below); however, many credit card issuers go above and beyond the SCRA and offer additional benefits, such as waiving annual fees or even lowering interest rates beyond what the law requires.

Let’s take a look at the SCRA, five additional military credit card benefits, how to request those benefits and some top cards for active military personnel.

What is the SRCA and how does it help military members?

The SCRA protects the finances of military members (and their families) while they are on active duty. Congress passed the SCRA, which expanded the Soldier’s and Sailors’ Civil Relief Act of 1940, in 2003.

The SCRA caps active military members’ interest rate at 6 percent for financial obligations incurred before military service. The creditor must forgive interest greater than 6 percent. It can’t defer it to later and it must also forgive the interest retroactively.

SCRA deals with rental agreements, security deposits, mortgage interest rates, health insurance, income tax payments, mortgage foreclosures and, yes, credit cards.

Military members have until 180 days after their end of service to notify creditors and provide the necessary documents to benefit from the 6 percent APR cap.

To be eligible, you must meet at least one of the following criteria:

  • Be a member of the U.S. Armed Forces on active duty or a reserve component called to active duty,
  • Be National Guard personnel under a call or order to active duty for more than 30 days,
  • Be a Public Health Service and National Oceanic and Atmospheric Administration commissioned officer,
  • Be a U.S. citizen servicing with another nation, which is allied with the U.S. “in the prosecution of a war or military action,” or
  • Be the spouse of an active duty service member.

The SCRA helps those in the active military with a number of financial situations, but let’s look at how credit cards go beyond that.

4 additional credit card perks for military members

From waiving fees to cutting the APR, credit card companies thank active service members in multiple ways. Here are a few of the ways credit card companies say “thank you” to military members.

Annual fee waivers

This is largely an under-the-radar perk but can be a huge money saver, especially for cards with hefty annual fees like the CardName, which offers lucrative luxury perks but comes with a $550 annual fee (read more about this card below). If you’re active-duty military, however, you don’t have to worry about the $550 fee.

American Express isn’t the only issuer to waive annual fees for active duty military. ChaseCapital One and Citi all waive annual fees for active military members (and, yes, you must be active duty to qualify for the fee waivers).

Lower APR

The SCRA requires creditors cap their APR at 6 percent for active service members; however, some card issuers drop it even further.

Citi completely removes the APR during active duty time. USAA and Capital One lower the APR to 4 percent. USAA even goes beyond that and extends the 4 percent APR until a year after active duty ends.

No late fees

American ExpressCapital OneUSAA and Chase will waive late fees for active military members.

A word of caution — late payment information will still go to credit bureaus, which can affect your credit score. So, it’s not a good idea to miss a payment even if your card may waive the fee.

Wipe out all fees

Some credit card companies remove all fees while you’re on active duty. For instance, Capital One and USAA cut foreign transaction, balance transfer, cash advance and all other card-related fees.

How to request SCRA, additional military-based benefits

Now that you know about all of these benefits let’s talk about how you notify credit cards about being an active military member.

You must provide the creditor with a copy of your military orders. Contact your credit card company either via phone or online. Don’t be deterred if the customer service representative isn’t familiar with these benefits. Just request to speak to a supervisor. You should also expect to answer a series of questions about your military service.

Once your creditor receives your information, it will review your SCRA eligibility to confirm you are an active duty military member or the spouse of an active service member. The creditor will examine the provided documents and check the Department of Defense Manpower Data Center.

Each credit card has a similar process to verify SCRA benefits and to get other active military-related card benefits.

Top cards for military members

All credit cards will give you the benefits that are part of the SCRA, and some cards will provide added benefits. If you’re ready to start taking advantage of these benefits available to you, keep reading for some of the top cards from issuers offering special military benefits.

Before you apply, however, remember that being active duty military doesn’t automatically mean you’ll be approved for a credit card; your credit history and score will still be factors in whether you’re approved.

To see the list of best cards, head over to CardRatings.

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