Benefits: Credit Card Benefits for US Military & Spouses

There are many bonuses and perks offered by credit card issuers to active duty military members. Some credit cards for active duty soldiers, sailors, airmen, and Marines waive annual fees, cap interest rates, and/or offer money back for purchases up to a certain amount.

You may find some credit card companies offer these on a case-by-case basis or by request only, while others may advertise these perks as an ongoing feature of their credit programs. But did you know that in addition to programs a credit issuer may voluntarily offer, there are federally-mandated perks that all credit card companies must offer a service member on active duty when requested?

American Express Benefits for Military

American Express takes the SCRA protections a step further by waiving their annual fees for military personnel and their spouses. The Blue Cash Preferred card has a $95 annual fee and the Gold Card has a $250 annual fee. However, since the annual fees are waived you might as well take advantage of the great perks that the American Express Platinum Card offers. Such as access to hundreds of airport lounges and Uber, airline, hotel and TSA Precheck credits. Plus, get a 60,000-point bonus when you spend $5,000 on your card in the first three months.

The Servicemembers Civil Relief Act (SCRA) And Credit Card Interest Rates

The SCRA mandates a 6% interest rate cap on loans you took out before starting active duty. This cap is described at the United States Department Of Justice official site as a limit to the amount of interest charged on “certain financial obligations that were incurred prior to military service.” This limit is “no more than six percent per year, including most fees.”

The caveat is that the cap is not automatic, must be applied for with the credit agency, and must be applied for with all credit card companies you wish to claim your SCRA rights with. You will be required to provide a copy of military orders and a formal notice in writing.

There is also a time limit on these notices-you have until 180 days after the end of military service to file the notice. The U.S. Department of Justice notes that when you file your notice, the creditor is required to fully forgive, rather than defer until later, the amount of interest greater than six percent per year.

The interest rate must be forgiven retroactively, and the credit card company is not allowed to engage in any practice that results in “…accelerating the payment of principal in response to a properly made request for a six percent interest rate cap.”

What You Should Know About Military Credit Card Benefits

Viewed from a certain perspective, a great deal of the American economy involves two kinds payments; those that are known up front, and those that are part of what some call “gotcha” tactics.

A gotcha tactic can be anything from a sudden increase in your interest rate due to one or more missed or late payments that is applied as per the agreement you make with the creditor – often this increase potential is spelled out in detail only in the fine print of the agreement, which some people choose not to read closely.

But “gotcha” tactics also work in the other direction – you may be eligible for discounts, lower rates, cash back on purchases, and other perks, but these will not be applied automatically and are generally not advertised. You have to ask for the perks, but before you can do so you have to know to ask for them.

Military credit card benefits are not standardized. You may be required to be on active duty for a minimum amount of time (30 days is one standard), and you will be required to furnish proof of service and possibly evidence that your military service commitment is for a minimum time or that you are about to re-enlist.

Some of these requirements will vary from lender to lender, except where the SCRA laws apply.

Some credit card companies are more generous than others with their military benefits, and some credit card companies have a reputation for liberally interpreting your SCRA rights, offering more than the law requires when such rights are claimed. American Express is one company that has earned a positive reputation in this area.

Remember, you will generally be required to request or sign up for these credit card perks, they are not automatic.

Credit Card Benefits For Military Members You Should Ask For When Signing Up For A New Credit Card Account

Here is a list of perks that are offered by many credit card companies to their military customers – if you are not currently enjoying some or all of these perks, it’s a very good idea to call your credit card company to request the following, especially when opening a new account:

  • No over-limit credit limit fees
  • No annual fee for military members
  • Cash back incentives for military members
  • Cash back programs specifically for military-related expenses such as moving, uniforms, etc.
  • No overseas transaction credit card fees for military members
  • Incentives for electronic payments or automatic electronic payment transfers
  • Waived or reduced credit card cash advance fees for military members
  • Lower APR interest rates for military members
  • Any special perks or incentives for deployed service members or families of deployed service members
  • Special “reserve cards” for military members and/or family members
  • No penalty APR interest rate adjustments for late payments

Which Credit Card Companies Offer The Best Military Credit Card Perks, Bonuses, And Incentives?

Opinions may vary, but one of the best things military members and their families can do to get military-oriented credit card benefits is to apply for credit cards from a military or military friendly company such as USAA, Navy Federal Credit Union, or the company currently servicing your government official travel charge card.

There are other credit card companies that have historically offered perks and military credit card benefits, including Chase Bank, Bank of America, American Express, and Capital One.

Of these, Capital One is rated by third-party websites as being less of an advantage than the others, but Capital One credit cards have waived both annual fees and overseas charge fees for active duty military members. It’s always best to call to inquire about the most current military-friendly credit programs available.

Chase Sapphire Reserve for Military

All Chase personal credit cards are offered with no annual fees for active duty military servicemembers and their spouses. The top two choices are the Chase Sapphire Preferred or Sapphire Reserve cards. The main difference is that the Preferred offers 10,000 more sign up bonus points while the Reserve offers a recurring $300 annual travel credit.

  • No foreign transaction fees
  • $450 annual fee (and $75 authorized user fee) completely waived for US military and spouses
  • $300 annual travel credit (Uber, taxi, airfare, hotel, train, car rental, etc)
  • 3x points on travel and dining worldwide
  • Redeem points with a 50% bonus when booking travel through the Chase
  • Automatic travel insurance on trips purchased with the card including trip cancellation, delay, interruption, lost baggage, and auto rental collision
  • $100 Global Entry sign up fee reimbursed every 4 years
  • 50,000 bonus points when you spend $4000 in the first 3 months of opening account

Important Advice About Signing Up For New Credit Cards

  • Not all credit is billed the same; the interest rate and terms of repayment on a credit card cash advance may be different-and higher-than for ordinary purchase transactions. Know what you are agreeing to before you use the features of your credit account that result in cash back to you from the credit card company.
  • Be sure to ask how much advance notification the credit issuer requires before you leave active duty.
  • When signing up for a new credit card, be sure to check the application to see if there is an option to choose your source of income. If so, always select “military” or “government” as your income source where available. This may go a long way toward helping you claim your military credit benefits from the very start.
  • Check to see if your existing or new credit card provider offers a special hotline for military customers.
  • Know the terms and conditions-what perks apply to your account while serving on active duty, and which will continue if you retire or separate from military service? Ask these important questions before they become a real-world issue.
  • Read the fine print on all your credit card accounts. Know under what circumstances you will be charged added fees, fines, penalties, etc. even as a military customer. Don’t assume that you will be exempt from late charges, interest rate increases, or other actions based on late or missed payments, going over your account limits, etc. When you sign the legally binding agreement for your credit account, you will be subject to the rules you agree to. Know before you sign.

How to Save Your Credit Rating in the Military

Military members, dependents, and military spouses are especially vulnerable to credit problems like identity theft, the potential for lost or stolen cards and personal information, and many other problems.

Fortunately, there are steps you can take to save your credit rating even if you are compromised, miss a payment, or have related issues. Credit and credit ratings are tricky but there are some very simple steps you can take that directly safeguard your credit.

It is very important to stress that these are steps all consumers should take themselves. Fixing your credit is FREE and you do not need to pay a third party to help you take the simple credit repair steps below.

Save Your Credit Rating by Knowing Your Credit Reports

First and foremost, reviewing copies of your credit reports regularly protects you from being the victim of identity theft, and to make certain there are no outdated items on your report, errors, etc.

For added protection, know the contents of your credit reports and follow the five tips below. It is that simple.

Tip #1: Add Some Credit

Some credit users don’t have enough credit to their name–they simply don’t have enough of a credit track record to show a lender they are a good credit risk. Other credit users may have a few credit cards but carry high balances. In both cases, adding a credit account may be a good idea.

It’s never a good plan to apply for new credit just ahead of or during a major credit application. Adding a credit account is something that should be done in the planning stages for a new mortgage or car loan, a year before or more is ideal.

The credit agency Experian says on its official site that consumers can legally improve their credit utilization rate by “raising your credit limit on an existing account or opening a new credit account”.

Credit utilization rates are calculated based on all your available accounts. If you have five credit accounts and carry a balance of 50% on each account, adding a new one or increasing the credit limit on an existing account affects the calculation, lowering the utilization rate. This may sound like a bit of creative accounting, but the math and the rationale can definitely help you improve your credit.

Tip #2: Create An Emergency Fund

One of the biggest sources of stress is last-minute expenses that force you to dip into your bank account, potentially affecting your monthly budget.

This can be a serious issue, which is why it’s best to establish a separate bank account and fund for such emergencies when considering Tip #5.

It can be tough to do this in the middle of a typical military assignment. For example, when military members get PCS orders, they have the ability to request advance pay (basically an interest-free pay advance that is repaid in monthly installments over a year) and set up as a small fund for this purpose.

You can do the same thing with a reenlistment bonus, special pays or allowances, etc. The key is to pay attention to times when you may be due extra money from the Department of Defense and plan accordingly (e.g., annual clothing allowance.)

Tip #3: Get Help

Military bases, college campuses, and even lenders may offer classes and seminars on improving credit, becoming ready for a home loan, saving money, budgeting, and other key areas.

If you are living on-base overseas, find your nearest MWR program, Soldier Support Centers, and the USO for potential financial resources.

Your city and state government may have stateside programs open to first-time home buyers, new investors, and other categories of people hoping to learn better money management, credit repair, and investing skills.

A financial planner, tax expert, or investment advisor may be able to help you find or use resources in your local area to get more informed on good credit practices and how to repair your credit yourself and for free.

Tip #4: Reduce Your Credit Card Balances

Your credit report has a ton of useful information: lenders, X number of credit cards and other accounts. It also shows what your credit limits are, and the percentage of used credit limit.

Lenders often look at the borrower’s used credit lines before approving new lines of credit or loans. Ideally, you should reduce your credit card use so that you are well under 50% of your credit limit. As a general rule, 30% is the maximum, but it’s best to reduce the amount halfway below your credit amount.

That will still help improve your credit over time. Carrying high balances on your credit cards does not help you when applying for an auto loan or a VA mortgage.

The credit utilization rate, which calculates the percentage of your credit use across all accounts, is used to determine your credit. If you have three credit cards, your credit utilization rate may be high if there are higher balances.

However, the credit reporting agency, Experian, reports you can change that ratio in a very simple way.

Advanced Tip

Before applying for credit, a va loan etc., make a payment to your account before your card’s statement closing date, instead of on or before its payment due date. Card issuer’s typically report the statement closing date balance to the credit bureaus on the statement date. Thus, even if you pay off your credit balance before the due date your credit report may still show a balance which will effect the utilization percentage used to calculate your credit score.

Tip #5: Set A Payment Schedule

Among the top three causes of bad credit scores, late and missed payments are serious issues. If you have missed or late payments on your credit record in the 12 months leading up to a major credit application like a VA mortgage or an auto loan, your chances at loan approval are seriously compromised.

Do not apply for loans if you have late and missed payments in that 12 months, wait out your payment record until you have a full 12 months of “clean” payment record on the books for best results.

The best way to achieve a clean payment record? Military members, dependents, and spouses should set up auto-deduct payments, ACH transfers, allotments, or any other automated payment process to handle your accounts each month on-time every time.