Credit Card Benefits for Military in 2020
Figuring out what benefits you qualify for can be tricky, make sure you know what to look for at the bank.
Many active military members are unaware of the financial benefits they are eligible for. Waived fees, low interest rates, and lucrative cash-back deals are just a few of the many benefits offered to service members by the federal government and credit card companies. With these perks and benefits, service members with debt could save hundreds of dollars in waived interest. If you are an active-duty service member here are some things to consider.
Key Benefits under the Servicemembers’ Civil Relief Act
Under the Servicemembers’ Civil Relief Act (SCRA), banks are legally required to cap interest rates at 6 percent APR for pre-service loans and debt. This means that any car loan or mortgage that you acquired before entering the military cannot accrue an interest rate of higher than 6 percent. While all banks and credit card companies are required by law to follow the rules of the SCRA, many go above and beyond the requirements by offering even lower interest rates to active-duty service members. As a service member, you should look into the best credit cards for military personnel and take the time to understand your benefits.
Who Is Eligible for SCRA Benefits?
In order to be eligible for SCRA benefits, you must have opened a bank account prior to your service and meet the following requirements.
- You are an active duty service member in one of the branches of the military.
- You serve in the National Guard for more than a month.
- You are a spouse of an active duty service member.
- You’re a service member who can no longer serve due to substantial injuries.
While these are generally the requirements to be eligible for SCRA benefits, in some cases, your bank might provide benefits even if you don’t fall into one of the outlined categories. In order to receive benefits, you have to submit a request to your credit card company that includes proof of service. There are some key strategies you can use to maximize your SCRA benefits.
Reduce Your Interest Payment and Pay off Your Debt
One of the best advantages of the SCRA is that it makes it easier for service members to pay off their debt and balance their finances. Some credit card companies offer service members 0 percent APR, allowing service members to pay off a high debt, such as a car, with no interest. Additionally, many credit card companies will allow you to transfer debts from a card with a high interest rate to your military card, so that you can pay them off at a lower interest.
Build Your Credit Score Without an Annual Fee
One of the biggest deterrents of credit cards are annual fees—many credit cards will charge annual fees up to 500 dollars. Many people with bad credit scores aren’t eligible for credit cards without a fee, making it difficult to rebuild their credit. Luckily for service members, the SCRA waives the annual fees of credit cards making it easier for service members to establish a good line of credit. This key benefit of the SCRA aims to get service members off on the right financial path by paying their balances in a timely manner and borrowing small amounts.
Maximize Available Rewards
Many credit card companies will go even further to reward service members that have a good credit score. If you are a service member that has done an excellent job at managing your finances, your credit card company will most likely go the extra mile to offer you lucrative rewards. Some of the premium features credit card companies will offer service members include:
- Waived baggage fees
- Cash-back offers
- Airline points and credits
- Sign-up bonus
Military service members face distinct financial and emotional challenges. The government has enacted many financial benefits that must be legally observed by banks and credit card companies. In addition, many credit card companies go beyond the legal requirements to offer financial rewards and perks to service members. If you are a service member, you should ensure you are maximizing your financial benefits.