Skip to main content

By Carol Church

Do you remember being issued your first credit card? I do. I was in college, and companies were eager to snag my business–probably assuming that my parents would bail me out if necessary. With that card came a feeling of power, but also some worry.

The ability to use a credit card for payment is a valuable one, and one most of us don’t want to give up. Credit cards can be especially important to military families, who may face unexpected expenses. Of course, these cards have their advantages and disadvantages. They need to be used with care in order to avoid snowballing debt or a damaged credit rating. And at times, they can really “ding” you with late fees and interest rate increases.

How the SCRA Helps Service Members with Credit Cards

For those in the military, no discussion of credit cards would be complete without mentioning the SCRA, which provides crucial financial and legal protections to service members on active duty and for a period of time afterwards. The act applies to members of the Army, Navy, Air Force, Marines and Coast Guard as well to some Reserve members, and it continues to apply if a service member becomes exempt from duty due to injury. These benefits can even be requested retroactively, if this is done within 180 days of being released from active duty.

Under the terms of the SCRA, credit card companies are legally required not to charge more than 6% interest on loans to active duty service members. (It’s important to note that these protections typically apply only to debt acquired before entering service. This means that service members may actually have two rates on their cards—one for pre-service debts and one for new purchases.) Card companies also must waive all fees, including late fees, annual fees, transfer fees, etc. The service member’s spouse can also receive these benefits as long as they have opened a joint line of credit with someone who is eligible for SCRA.

Living on Credit Cards by Images Money

What’s more, some banks offer special packages that go above and beyond what is legally required by the SCRA. For instance, they may offer interest rates even below the 6% required (potentially as low as 0%), or have special staff exclusively available to service members. To find deals like these, contact the company or do an Internet search.

Don’t Forget to Apply

Remember, though: service members must request these benefits. They are not granted automatically. To do so, members should notify their credit card company in writing that they are on active duty and send them a copy of their orders.

Note that the interest rate protections of the SCRA apply to other debts as well, and that it provides additional assistance with other financial obligations. To learn more, visit SCRA Questions and Answers. And for more help with the SCRA and the protections it provides, service members can visit their local military legal assistance services office. They can locate the closest one to them here.