Life in the Army moves fast. With constant training cycles, deployments and constantly fighting to meet mission requirements, it is easy to forget about keeping things like our personal finances in order. When we do get those coveted block leave opportunities or four-day weekends, most of us want to maximize that time off with our families while still sticking to a budget. That’s why taking a few minutes to educate yourself on the benefits afforded to you in the Servicemembers Civil Relief Act (SCRA) and the Military Lending Act (MLA) is so important.
Think about the last time that you had a PCS move and had to break a lease early. You may not have realized it, but you were exercising benefits afforded to you under the SCRA. Something you may not have known about the SCRA is that it caps interest rates at 6 percent for any debts incurred prior to entering active service. This cap encompasses important services such as credit cards and mortgage loans. Some credit card companies, like American Express and Chase, went beyond their obligations under the SCRA and completely waived annual credit card fees; this move saved card holders hundreds of dollars per year.
Advocates say the consumer agency already has legal authority to monitor these troop protections.
The MLA is focused on protecting service members and their dependents from certain lending practices. Most notably, the MLA mandated credit lenders to comply with the Military Annual Percentage Rate (MAPR) of 36 percent. This 36 percent encompasses not only the loan itself, but any ancillary services or other fees on the same line of credit. In most cases, annual fees will be waived for both you and your covered dependents on almost all major credit cards.
To be applicable for these benefits you must be on active duty or on active federal orders of no less than 30 days for National Guard and Army Reserve soldiers (Title 10 Title 32). Your dependents can receive this benefit as well if they fall into one of the below categories:
- Children under age 21.
- Children under age 23 who are enrolled full time at an approved institution of higher learning and dependent (or dependent at the time of the member’s or former member’s death) on a covered member for over one-half of their support.
Once you’ve determined that you are covered, you’ll want to apply for a top-tier credit card and begin to reap the associated benefits. Here are some of those benefits:
- Waived $450-$550 annual fee.
- Priority Pass Select membership (lounge access at airports).
- Global Entry application fee reimbursement.
- $200 per year in Uber credits (American Express Platinum Card).
- $250-$300 per year in travel credit (Chase Sapphire Reserve and Citi Prestige).
- $500-$700 in welcome bonuses after meeting a minimum spend amount. If your dependents get the same card, some companies (like Chase) will allow you to pool these points together. Hello free family vacation!
Most credit card companies will automatically enroll you in these benefits, but if not, you can easily get them extended by calling most customer support lines. Some companies have even established web pages and dedicated staff to help service members navigate benefits. For example, American Express offers a web page and Chase offers a military phone line at 1-877-469-0110.
Could the Servicemembers Civil Relief Act apply to you (or your mortgage)?
If you are an active duty service member who is a responsible borrower and have the credit score to support that, there is no reason not to begin reaping these benefits. Research the best ways to redeem points for the most value and plan this just like a military operation. The benefits are real and you have earned them through service, so get out there and start maximizing time off with your family, friends and loved ones.
Capt. Rich Dolan is assistant professor of military science at Hofstra University.