Best Credit Card Benefits For Active-Duty Military

Active-duty military members can qualify for a range of credit card perks and protections civilians simply cannot, with most of them stemming from the Servicemembers Civil Relief Act (SCRA). These benefits help eligible military members pay less in interest when they carry a credit card balance while also making it easier for them to secure premium credit cards with superior perks without paying their annual fees.

Overall, this 2003 law is designed to make it easier for our servicemembers to focus on their service rather than financial stressors like debt and high interest rates. If you’re thinking about signing up for a new credit card, you’ll want to understand your rights under this act and the benefits you can receive from your card issuer. In this guide, we cover the Servicemembers Civil Relief Act, as well as the best credit card benefits for active-duty military members and how they work.

What is the Servicemembers Civil Relief Act?

Eligible members of the military are protected by the Servicemembers Civil Relief Act — commonly called the SCRA. This federal law was designed to provide financial and legal protections to active-duty military members.

The benefits and protections the SCRA offers include reduced interest rates on debt incurred prior to active duty military service, protections against default judgments and protections against eviction, all with the goal of helping active-duty military members dedicate their attention to their duties without undue financial stress.

Who qualifies for SCRA benefits?

SCRA benefits and protections are available to members of all branches of the military, including the:

• Air Force
• Army
• Coast Guard
• Marine Corps
• National Guard
• Navy
• Space Force

To qualify for SCRA benefits, military members must be on active duty, a reservist on federal active duty or a member of the National Guard on federal orders that extend longer than 30 days. Commissioned officers of the National Oceanic and Atmospheric Administration (NOAA) or the Public Health Service who are serving on active duty may also be eligible.

You may be able to extend your SCRA benefits to qualifying family members, as well. For example, SCRA benefits can be used by anyone holding a valid power of attorney for an active duty servicemember. A handful of benefits can also apply to dependents, according to the Consumer Financial Protection Bureau (CFPB).

Who doesn’t qualify for SCRA benefits?

While many of the protections in the SCRA extend to families, it doesn’t necessarily mean everyone in your family will be covered. The SCRA recognizes dependents and spouses as family, so SCRA protections won’t apply to relatives not listed as your dependents.

For example, SCRA benefits include the right to terminate a lease without penalty on a property that is set to be occupied by the servicemember or his or her dependents (spouse or children).

How to notify creditors of your SCRA qualifications

To take advantage of your SCRA protections, eligible service personnel must provide their credit card issuers or lenders with notice and a copy of their military orders at any time while on active duty or up to 180 days after the end of their active duty period.

Some creditors allow you to do this online, while others require you to mail your documents. From there, the creditor takes action depending on the protections that apply to your situation.

What benefits do card issuers offer to active-duty military?

Among the significant benefits of the SCRA for military personnel is a cap on interest rates for pre-service debts. Most banks and credit card issuers will also refund or waive interest and annual fees for financial obligations incurred before a servicemember’s active duty period.

Interest rate caps

The SCRA outlines a 6 percent interest rate cap that creditors must abide by. In addition to credit card debt, qualifying debts under this interest rate cap include:

• Auto loans
• Installment loans
• Medical bills
• Mortgage loans
• Student loans
• Title loans

For example, if a servicemember gets a credit card with a 20 percent APR before joining the military, they can request a lower 6 percent rate under the SCRA. The credit card issuer is then required to forgive — not defer — any interest charged beyond the 6 percent annual rate cap. They must also forgive this interest retroactively.

However, because debts that qualify for SCRA must have been incurred prior to military service, it’s possible for military members to have multiple interest rates on the same credit card. For example, debt incurred prior to military service is capped at 6 percent, yet debts incurred during military service can be charged a regular variable APR.

Waived fees and additional benefits

Beyond SCRA protections, many card issuers provide additional benefits to active duty military and their spouses. For example, Capital One waives credit card fees and limits interest rates to 4 percent APR during and for a year after active duty service.

Many other issuers also waive annual fees for top rewards and travel credit cards, allowing military members to enjoy premium benefits without incurring costs.

Military Lending Act benefits

Issuers also account for protections under the Military Lending Act (MLA), a federal law enacted in 2006 that sets guidelines for debt incurred during active military service, as opposed to before that service like the SCRA does. However, the interest rate cap for the MLA is a high 36 percent military annual percentage rate (MAPR), so it might not actually change much when it comes to the interest rate the issuer charges you on new debt. But because the MAPR includes fees in that 36 percent, you might still be eligible for having a card’s fees waived.

How do credit card benefits differ for active duty vs. veterans or retired military members?

Active-duty military members and veterans can always apply for the same selection of rewards and travel credit cards. However, credit card issuers generally only waive fees for eligible active-duty military personnel, and the same applies to SCRA benefits.

With that in mind, veterans may want to think twice before signing up for a premium travel credit card with a high annual fee. Once you’re a veteran, you may want to focus on cash back credit cards instead, or on rewards credit cards from military-affiliated institutions like USAA and Navy Federal Credit Union.

Best credit card benefits for active-duty military members

The credit card benefits you receive can vary depending on the card issuer, especially because some issuers provide even more benefits on top of what’s required by the SCRA. But it’s important to keep in mind that the SCRA is for debts taken on before servicemembers are deployed.

Here are benefits qualified cardmembers might receive from top issuers:

How to maximize SCRA benefits

If you’re an eligible servicemember who is gearing up for active duty, there are several ways to maximize SCRA benefits. These include the following:

• Save on interest while you pay down debt. Paying down debt can be more affordable if you qualify for SCRA benefits, and in more ways than one. You can save on interest by requesting your interest rate be reduced to the 6 percent maximum required by SCRA. Also note that balance transfer fees are typically waived on SCRA-eligible accounts, so you may be able to pay down debt with 0 percent APR and no upfront fees as well.
• Score premium credit cards without paying premium annual fees. Many of the best travel and rewards credit cards let SCRA-eligible military members get approved with a $0 annual fee. This means you could secure a card that normally costs $550 to $695 per year with $0 annual out-of-pocket cost. Note that many issuers require you to have already have the card before going on active duty. Once you’re placed on active duty, you can call and request to have the annual fee waived.
• Utilize rewards, statement credits and other cardholder benefits. Premium travel credit cards can offer benefits worth thousands of dollars each year, and you should take advantage. The right card could get you perks like global airport lounge access, annual travel credits, fee credits for Global Entry or TSA PreCheck membership and plenty of other benefits. Examples of cards with the best perks for the military include the Capital One Venture X Rewards Credit Card and the Chase Sapphire Reserve®.

The bottom line

Military members can benefit from interest rate caps and waived fees thanks to the protections in place by the SCRA. This makes it easier to fit high-value rewards credit cards that would typically come with an annual fee into your wallet.

If you’re ready to choose a credit card that lets you take full advantage of your military benefits, check out our picks for the best credit cards for active-duty military members.

Like other consumers, though, military members should try to avoid racking up debt they can’t comfortably afford to pay off. Once active-duty military service ends and you become a veteran, you likely won’t be eligible for the same types of benefits.