6 Credit Card Benefits for Military Personnel That You Should Know About
Military service members get access to some unique financial benefits under federal law. In addition to these federal protections, many credit card companies extend exclusive perks to military members, such as reduced interest rates, waived fees, and travel perks.
Understanding these features and choosing the right cards can help service members and their families make smarter decisions and save money throughout their military careers. In this article, we'll look at six credit card benefits that military personnel should know about, and how to maximize value with your credit card.
Compare Cash Back Credit Card Options for Veterans
1. Federal Legal Protections
Many credit card benefits for military personnel are made possible by two federal laws - the Servicemembers Civil Relief Act (SCRA) and the Military Lending Act (MLA). Here's how they work:
- SCRA: Under the SCRA, there is an interest rate cap of 6% APR on credit card balances incurred before entering active duty. Credit card companies must forgive interest above 6%. This protection applies during active duty, and in some cases, for a period afterward.
- MLA: For credit card accounts opened during active service, the MLA provides a maximum Military Annual Percentage Rate (MAPR) of 36%, which includes all interest and fees except for certain permissible charges. The MLA also guarantees protection from predatory lending and hidden fees.
While the SCRA and MLA provide legal protections for people in the military, many credit card issuers go beyond the requirements and offer more incentives for active duty personnel.
2. Waived Credit Card Fees
One of the most valuable financial benefits for military personnel is waived credit card fees. As a way to support service members, many credit card issuers eliminate fees as part of their military policy. Common waived fees include:
- Annual fees (even on premium travel cards)
- Late payment fees
- Foreign transaction fees
- Balance transfer fees
- Cash advance fees
Some credit card companies, like American Express and Chase, also waive fees for military spouses and domestic partners. However, not all credit card companies extend these benefits to family members. Before you select a card, make sure to find out what fees you'll need to pay.
3. Reduced Interest Rates
While the SCRA imposes a 6% cap on interest, many credit card issuers voluntarily reduce rates even further for active duty military. Some examples include:
- Lower-than-required APRs on pre-service debt.
- Temporary 0% APR on balances incurred before active duty.
- Reduced APR programs for military members, spouses, or dependents.
These interest rate reductions may apply to new purchases, existing credit card balances, or both, depending on the issuer.
Pretty much everyone can benefit from a reduced interest rate, but it's especially beneficial for service members who:
- Are carrying credit card balances from before active duty.
- Have high monthly expenses.
- Support family members during deployments.
- Want to reduce debt faster while interest rates are low.
Compare Top Rewards and Cash Back Credit Cards
4. Premium Travel Benefits
Military families tend to travel more than the average civilian, whether due to PCS orders, training, or deployment. Many credit card issuers offer premium travel perks that can make this lifestyle more manageable, and potentially, more affordable.
You can often find premium credit cards with travel benefits, such as:
- Airport lounge access
- Travel insurance protections
- Reimbursement for TSA PreCheck or Global Entry
- Hotel and airline status
- No foreign transaction fees
Premium credit cards often have extremely high annual fees. But because that cost is waived for military members, you can access premium travel perks, travel insurance, and statement credits at no cost.
5. Cash Back and Rewards on Everyday Spending
Some of the best credit cards for military members provide cash back rewards on your everyday spending, whether it's groceries, gas, on-base purchases, or utilities. Cash back credit card features vary, but you can typically find cards with:
- Flat-rate cash back on all spending
- Bonus cash back for categories like online retailers or dining
- Enhanced rewards for base purchases (in some cases)
- Introductory bonuses without high spending requirements
Whether you're active duty, a veteran, a reservist, or a military spouse, a cash back credit card can be a practical way to get rewarded for the things you're already spending money on. However, not all cash back cards are created equal, so you should consider:
- Whether the rewards categories match your lifestyle
- If the card has foreign transaction fees
- What fees are waived for military personnel and spouses
- How rewards are redeemed (statement credit, gift cards, etc.).
6. Credit-Building and Low-Interest Credit Cards
If you have a low credit score or no credit history, you might benefit from a credit card that can improve or build your credit. Military personnel can get credit cards designed for:
- Building or rebuilding credit
- Avoiding high interest rates
- Accessing long-duration 0% intro APR periods
- Securing low, stable APRs over time
Low-interest cards don't always have the best rewards, but they can provide cost-effective borrowing. These credit cards can be especially beneficial for young service members who are establishing credit, junior enlisted members on tighter budgets, and anyone planning for major purchases or debt consolidation.
However, it's important to know that opening a credit-building card won't automatically improve your credit. You still need to prioritize making on-time payments and keeping your credit utilization low.
Explore Card Highlights and Detailed Comparisons by the Experts
How to Maximize Military Credit Card Benefits
To get full value from credit card perks, service members should take the following steps:
- Apply for SCRA proactively: Most active duty service members don't automatically receive SCRA and MLA benefits. Typically, you need to apply before you get a credit card or take out a loan. Most credit card issuers will need a written request with a copy of your military orders to verify your status.
- Learn about each issuer's military policy: Some credit card companies offer military-exclusive benefits that go beyond the legal requirements under the SCRA or MLA. These policies differ widely, so comparing them can unlock additional value, especially if you can get extra perks.
- Match the card to your lifestyle: Choose a credit card that matches your current lifestyle and spending habits. For example, if you're stationed overseas, look for a card with no foreign transaction fees. If you want a simple cash back card, make sure the one you pick provides rewards in the categories where you spend the most.
- Take advantage of waived fees: If a credit card issuer waives its annual fee for active duty service members, the value of a premium card can increase dramatically. If you're planning to travel, either for vacation or relocation, take advantage of the card's travel features to save money and improve your experience.
- Review benefits before leaving active service: Many credit card benefits for the military expire when your service ends. Before leaving active duty, reassess your credit cards and decide whether to keep, downgrade, or close certain accounts. Otherwise, you could get hit with steep annual fees or interest rates.
Elizabeth Rivelli is a contributor with more than three years of experience covering insurance and personal finance. Her expertise spans a wide range of insurance lines, including auto, home, renters and life insurance. She has also published content for several insurance providers, including Ethos Life.