Active duty U.S. military members are eligible to receive money saving financial relief and protections under the Servicemembers Civil Relief Act (SCRA). Military personnel become eligible for SCRA benefits starting on the date when their active duty orders are received, and SCRA coverage usually terminates within 30 to 90 days after their date of discharge from active duty. SCRA only applies to Reservists and members of the National Guard when they’re serving on active duty orders. Financial relief under the Servicemembers Civil Relief Act is available to active duty members of all the Uniformed Services branches.
The SCRA, formerly known as the Soldiers’ and Sailors’ Civil Relief Act, is a federal law enacted in 2003, that restricts or limits actions against military personnel currently serving on active duty. The Act was designed to allow active duty service members, and especially those who are deployed, to “devote their entire energy to the defense needs of the Nation.”
The Servicemembers Civil Relief Act includes protections and provisions which cover:
- Credit card interest rates
- Cellular service provider contracts
- Termination of:
- Rental agreements
- Automobile leases
- Phone service
- Suspension of professional liability insurance
- Right to continue to vote at state, federal and local levels
- Eviction prevention
- Security deposits
- Installment contracts
- Protection again default judgements
- Postponement of foreclosures
- Postponed civil judicial proceedings
- Deferred income tax payments
- Protection for small business owners
SCRA relief and protections can also apply to the spouses and children of the qualified servicemember, as well as any individual who relied on the servicemember for at least 50 percent of their support, for 180 days prior to using the Act. If you’re unsure of whether SCRA applies to you, eligibility can also be determined through your base Legal Assistance Office.
SCRA Credit Card and Loan Benefits
In accordance with the Servicemembers Civil Relief Act, most major banks and credit card issuing companies will offer a refund on interest and annual fees for certain financial obligations that were incurred prior to one’s active duty military service. Banks will also lower the interest rates on loans that existed before the servicemember joined the military.
For example, if you bought a car before serving on active duty, and your current interest rate is 18 percent, you can invoke your SCRA benefits and have your rate lowered to 6 percent. Please note that in this same example, military personnel who purchase a car while serving on active duty, cannot apply SCRA to lower the interest rate on their loan.
Chase supports the military by offering active duty personnel interest rates that are 2% lower than what SCRA actually requires, meaning that you could lower your interest rate to 4% while on active duty, and for a year afterward. Credit card companies will also waive annual credit card fees, offering considerable savings. American Express Platinum cardholders could save $550 annually.
The interest rate cap applies to all debts incurred prior to entry into active-duty service, including student loans, credit cards, mortgages and car loans, and remains in effect for the duration of a service member’s active-duty service. Interest in excess of six percent must be forgiven, not just merely postponed, and the amount of the monthly payment must be reduced to reflect the lower interest rate.
Receive SCRA Benefits
In order to receive benefits under the SCRA, you must affirmatively invoke or request relief. Your active duty military status must be verified before you will receive benefits. This process varies depending on the company. We’ve also prepared a list of companies offering SCRA benefits, so that you can easily apply Servicemembers Civil Relief Act protections and provisions to your eligible accounts and loans.
A letter containing the following information is typically sufficient: 1) account number, 2) start date of active-duty service, 3) a request for a reduction in interest rate pursuant to the SCRA, and 4) a copy of active-duty orders. On-base legal offices often have SCRA letter templates that can be used as well.
For more information on your Servicemembers Civil Relief Act benefits, please contact your base Legal Assistance Office, or visit the official website on Servicemembers Civil Relief Act
American Express Benefits for Military
American Express takes the SCRA protections a step further by waiving their annual fees for military personnel and their spouses. The Blue Cash Preferred card has a $95 annual fee and the Gold Card has a $250 annual fee. However, since the annual fees are waived you might as well take advantage of the great perks that the American Express Platinum Card offers. Such as access to hundreds of airport lounges and Uber, airline, hotel and TSA Precheck credits. Plus, get a 60,000-point bonus when you spend $5,000 on your card in the first three months.
Chase Sapphire Benefits for Military
All Chase personal credit cards are offered with no annual fees for active duty military servicemembers and their spouses. The top two choices are the Chase Sapphire Preferred or Sapphire Reserve cards. The main difference is that the Preferred offers 10,000 more sign up bonus points while the Reserve offers a recurring $300 annual travel credit
Sapphire Preferred for Military
- 60,000 bonus after you spend $4000 in the first 3 months of card membership
- $95 annual fee waived for military personnel and spouses
- 2X points on travel and dining at restaurants
- No foreign transaction fees
- Primary rental car insurance coverage
Chase Sapphire Reserve for Military
- $450 annual fee (and $75 authorized user fee) completely waived for US military and spouses
- $300 annual travel credit (Uber, taxi, airfare, hotel, train, car rental, etc)
- 50,000 bonus points when you spend $4000 in the first 3 months of opening account
- 3x points on travel and dining worldwide
- Redeem points with a 50% bonus when booking travel through the Chase
- Automatic travel insurance on trips purchased with the card including trip cancellation, delay, interruption, lost baggage, and auto rental collision
- $100 Global Entry sign up fee reimbursed every 4 years
- No foreign transaction fees
|Companies who support the SCRA||Credit Card Benefits for the Military|
|Military Star Card Benefits||Banks That Deposit Military Pay Early|
|Chase Military Fee Waiver||Amex Military Fee Waiver|