Military Credit Cards
The Balance’s Guide to Military Credit Cards
Frequently Asked Questions
How do military credit cards work?
Some banks have credit card programs that are just better for military members than other cards are. Many card issuers extend benefits to active-duty service members that go beyond what’s required under the Servicemembers Civil Relief Act (SCRA). Many also require cardholders to be connected to the military, either directly or through family.
What are SCRA credit card benefits?
The Servicemembers Civil Relief Act (SCRA) is a federal law that gives military members several financial and legal protections while on active duty.
Under this regulation, credit card companies are required to:
- Cap APRs at 6% for existing card balances
- Forgive any interest charges made in excess of 6%
- Waive select fees and service charges that result in a borrowing cost of above 6%
Many card issuers go beyond these minimum requirements and offer active-duty military members extra perks, like even lower APRs, extended low-interest periods, and waived fees.
What should you look for in a military credit card?
The best military cards will serve you well before, during, and after your service. If you’re in the military and looking for a new card, it’s important to consider the SCRA benefits you may get while on active duty, but don’t forget about other valuable card qualities like low APRs, attractive sign-up bonuses and rewards programs, reasonable annual fees, and effective customer service.
How do you lower interest on a military credit card?
The Servicemembers Civil Relief Act (SCRA) caps the interest rate on certain debts incurred prior to military service, including credit card debt. The cap is set at 6%. To activate the cap, servicemembers must notify a creditor of their service date(s), along with written proof, within 180 days of the end of their service.
Variable Interest Rate
A variable interest rate is one that can fluctuate over time, causing your loan payments to change. Variable rates are common on credit cards and home equity lines of credit (HELOCs).
The Servicemembers Civil Relief Act (SCRA) is a federal law that limits interest rates paid by active-duty military and their families on debt incurred prior to military service. The protection extends to credit card debt.
Most credit cards allow for a grace period, which is the amount of time you have to pay your balance in full without incurring a finance charge. The grace period usually starts on the first day of the billing cycle and ends a certain number of days later.
Revolving credit is a type of credit that can be used repeatedly up to a certain limit as long as the account is open and payments are made on time. With revolving credit, the amount of available credit, the balance, and the minimum payment can go up and down depending on the purchases and payments made to the account.
Credit Utilization Ratio
Your credit utilization ratio compares your credit card balances to your credit limits. In other words, it's how much you're currently borrowing compared to how much you could borrow.
An EMV chip card is a payment card that’s equipped with a secure computer chip that is all-but-impossible for thieves to copy.
Cash back is a bonus paid to credit cardholders who make qualifying credit card purchases.
Credit Card Debt
Credit card debt is a type of revolving debt. You can keep borrowing month after month as long as you repay enough that you never owe more than your credit limit.
Credit Card Network
A credit card network authorizes, processes, and sets the terms of credit card transactions, as well as transfers payments between shoppers, merchants, and their respective banks.
Annual Percentage Rate (APR)
The annual percentage rate (APR) of a loan is the total amount of interest you pay each year. This is calculated before compounding interest is taken into account. APR represented as a percentage of the loan balance.