If you’re a member of the military, you can save a lot of money by contacting your credit card company and alerting them of your active-duty status. A variety of federal acts and laws require credit card companies to provide service members with certain benefits that make it easy for them to save money. Because these perks aren’t widely advertised, many service members are not getting the benefits they deserve. If you are a service member you should notify your bank to get your federal benefits. Here is a guide to some benefits that provide service members with financial benefits.
The Service Members Civil Relief Act
The Service Members Civil Relief Act (SCRA) is a federal act that requires service members a variety of benefits. Under the SCRA lenders are required to cap the interest rates of loans at 6 percent for pre-existing loans—loans you took out before starting your active duty. The loans covered under this act include: credit cards, mortgages, student loans, and many more. This can be a huge benefit for service members as creditors must legally forgive all your interest above 6 percent.
In addition to the capped interest rate on loans, the SCRA protects against foreclosures on property you own and penalties from a lease termination. This can be a huge help in preventing your credit score from dropping as repossession of any asset can have an extremely negative impact on your credit. Taking advantage of the protections under the SCRA can positively impact your financial situation—all you have to do is apply. All the best military credit cards will provide these benefits under the SCRA.
The Military Lending Act
The SCRA is primarily focused on protecting assets and loans you had before you entered your service. The Military Lending Act (MLA) was designed to provide protections on loans taken out by active-duty service members and their spouses. This act provides interest caps on most of the same loans under the SCRA; however, the cap is 36 percent, which is significantly higher than the SCRA cap
Additionally, this act is focused on protecting service members from manipulative tactics by lenders that could leave them in a bad financial situation. To qualify for benefits under the MLA, you must be an active service member.
Military Specific Credit Card Benefits
Many credit card companies offer benefits to service members that go beyond federal requirements. When you are looking for a credit card, you should be sure to shop around for the military card that provides you with the most benefits. Some benefits to look out for include:
A waived annual fee for you and your spouse
No foreign transaction fees
Lucrative cash-back offers
Interest rates below 6 percent
The Veteran Administration Home-Loan Program
Many service members struggle to buy a house because they cannot afford the down payment. The Veteran Administration (VA) provides veterans with home-loan protections. The VA covers up to 25 percent of the total loan for a house, which allows veterans to buy a home without placing a down payment.
Rules and Tips for Applying for Service Member Benefits
In order to get service member benefits, service members must contact their credit card company and ask what benefits it offers and how to apply for them. Different credit card companies require different proof of status—some allow you to apply for benefits online while others require you to mail in proof of status. It is also important to ask the credit card company what benefits they offer beyond the SCRA or other acts, such as an interest rate lower than the required 6 percent. Additionally, many credit card companies will extend the perks under these acts to military family members, so you can also apply for your family.
Many service members are unaware of the many benefits they are entitled to under federal law. As a service member, it is important to educate yourself on the benefits you are eligible for, and search for a credit card company that will offer you the most lucrative benefits