What is the SCRA?
Active duty U.S. military members are eligible to receive financial relief and protections under the Servicemembers Civil Relief Act (SCRA).
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 ease the financial burden for active-duty service members, active reservists, and active Guard—especially those who are deployed.
Military personnel are eligible for SCRA benefits starting on the date when their active duty orders are received, and SCRA coverage typically terminates within 30 to 90 days after their date of discharge from active duty.
The Servicemembers Civil Relief Act includes protections and provisions which cover:
- Credit card interest rates (capped at 6%)
- 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
- Security deposits
- Installment contracts
- Protection again default judgments
- Postponement of foreclosures and repossessions
- Postponed civil judicial proceedings (including family law proceedings)
- Deferred income tax payments
- Protection for small business owners
- Prevents storage facilities from selling your belongings for past-due rent (owners must provide a court order)
Spousal MSRRA rights, and the ability to end a lease if the servicemember dies while on active-duty orders.
All active duty military members are covered by the SCRA act, including those in the Army, Air Force, Coast Guard, Marine Corps, Navy, Space Force, reserves and National Guard. SCRA only applies to Reservists and members of the National Guard when they’re serving on active duty orders. Commissioned officers in active service of the Public Health Service and the National Oceanic and Atmospheric Administration are also covered.
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 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%.
Chase supports the military by offering active duty personnel interest rates that are 2% lower than what SCRA actually requires, meaning 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 $650 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.
To receive SCRA benefits, provide lenders with a written request and orders for active-duty.
SCRA Lease/Rental Benefits
Additionally, SCRA allows individuals to break a lease when they go onto active duty, if the lease was entered into before going onto active duty. Also, the act allows a service member to terminate a residential lease entered into while in the military, if the member received orders to move to a new assignment or to deploy for a period of at least 90 days.
Service members and their families could become locked into an untenable lease agreement due to a stop-movement order. For example, they might have entered a new lease agreement prior to a permanent-change-of-station move. When the stop-movement order canceled their move, they may now be forced to pay two rents. Under SCRA, servicemembers caught in such a bind can get their second lease terminated.
A service member may seek protection from eviction of rented or leased property under SCRA. The service member or family member who has received notice of an eviction would need to submit a request to the court for protection under the SCRA. If the court finds that the service member’s military duties have materially affected the family’s ability to pay rent in a timely manner, the judge may order a stay, or postponement, of the eviction proceeding for up to three months or make any other just and reasonable order.
Military members may also terminate automobile leases in certain circumstances. Just as residential leases, if a service member enters into an automobile lease before going on active duty, the member may request termination of the lease upon entering active duty. However, for this to apply, the active duty must be for at least 180 continuous days.
Receive SCRA Benefits from Lenders
In order to receive benefits under the SCRA, you must affirmatively invoke or request relief by paperwork. Your active duty military status must be verified before you will receive benefits. A letter containing the following information is typically sufficient:
- account number
- start date of active-duty service
- a request for a reduction in interest rate pursuant to the SCRA, and
- a copy of active-duty orders. On-base legal offices often have SCRA letter templates that can be used as well.
This process varies depending on the company. While some companies require you to provide notification immediately, others may have a window of 30-180 days. 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.
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
The Justice Department’s Civil Rights Division was created in 1957 by the enactment of the Civil Rights Act of 1957. The act upholds the civil and constitutional rights of all Americans, particularly some of the most vulnerable members of society. As part of its work, the Civil Rights Division is tasked with enforcing the Servicemembers Civil Relief Act, which was enacted in 2003.
Under the SCRA, the attorney general is authorized to file a federal lawsuit against any person or entity that engages in a pattern or practice of violating this law. When a lawsuit is filed under the SCRA, the attorney general has the authority to seek monetary damages on behalf of individual service members and has the authority to seek civil penalties, as well as different types of remedies or reliefs.
Military Spouses Residency Relief Act (MSRRA)
MSRRA became law in November 2009, and changed some rules of taxation for servicemembers and their spouses. Under the new law, a military spouse who is present with a service member (SM) on active-duty orders can choose to pay tax on wages earned in their domicile state (permanent residence), their spouse’s state of residence, or the state of residence.
Note: The spouse would have to pay taxes to the state of domicile if the laws of that State required such payments.
Read more about MSRRA.
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 100,000-point bonus when you spend $6,000 on your card in the first six months.
American Express Platinum for Military
- Annual fee: $695 (waived when on active duty)
- Rewards: Cardholders get five Membership Rewards® points on flights booked directly with airlines or with American Express Travel (on up to $500,000 on these purchases per calendar year). Plus, earn 10x points on eligible purchases on your new card at restaurants worldwide and when you Shop Small in the U.S. during your first six months of card membership (up to $25,000 in combined spending). You can also earn 100,000 bonus rewards when you spend $6,000 in the first six months.
- Luxury perks: This card is meant for regular travelers. You get access to hundreds of airport lounges through the Global Lounge Collection, 24/7 access to the Platinum Club Concierge, which can help with travel arrangements, and a credit to cover your Global Entry or TSA Pre✓® application fee. You also get $200 a year in a statement credit to cover travel-related charges like baggage fees and in-flight refreshments that you charge on your card with a pre-selected airline.
- Active military perks: American Express waives the annual fee and even late fees when you’re on active duty.
- Foreign transaction fees: None
- Credit needed: Good, Excellent
To see the rates and fees for the American Express cards featured, please visit the following: Rates and Fees.
Chase 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.
Chase Sapphire Reserve for Military
- Annual fee: $550 (waived completely under certain circumstances for active duty military)
- Rewards: Earn 50,000 Chase Ultimate Rewards® points after making $4,000 in purchases the first three months. Those bonus points are worth up to $750 in travel since Chase Sapphire Reserve® cardholders’ points are worth 50% more when redeemed for travel through Ultimate Rewards®. Earn 5X total points on air travel and 10X total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3X points on other travel and dining and 1X point per dollar spent on all other purchases.
- Perks: Your points are transferable to a number of airline and hotel loyalty programs at a 1:1 rate or you can redeem for travel through Chase Ultimate Rewards® for 50% more value. You’ll receive up to $300 in statement credit each account anniversary year to cover travel expenses and you’ll enjoy access to more than 1,000 airport lounges worldwide. Cardholders are also protected with travel cancellation/interruption insurance and an auto rental collision damage waiver.
- Active military perks: No annual fee and Chase waives late fees during active service. *Subject to terms.
- Foreign transaction fee: $0
- Credit needed: Excellent
Chase Sapphire Preferred for Military
- Annual fee: $95, waived for active duty military
- Rewards: Earn 5X total points on all travel purchased through the Chase Ultimate Rewards® portal; 3X points on dining, including eligible delivery services and takeout; 3X points on online grocery purchases (excluding Target, Walmart and wholesale clubs); 3X points on select streaming services; 2X points on travel purchases; and 1X point on all other purchases. New cardholders receive 60,000 bonus Chase Ultimate Rewards® points, worth $750 in travel, when you make at least $4,000 in purchases the first three months.
- Perks: You can transfer your points to the card’s airline partners and hotel travel partners, making these incredibly flexible reward points. Furthermore, if you redeem your points for travel through the Chase Ultimate Rewards® program, those points are worth 25% more. That means the 60,000 bonus points are worth $750 in travel. Cardholders also enjoy travel cancellation/interruption insurance and an auto rental collision damage waiver.
- Active military perks: No annual fee and Chase waives late fees during active service.
- Foreign transaction fee: $0
- Credit needed: Excellent, Good
*Please note that each issuer has specific policies regarding waivers, interest rates, and offers for military members. In some cases, you must open the card BEFORE going on active duty; in other cases, special features/waivers apply only for cards opened after a specific date. We’ve done our best to offer general guidance on these offers. In all cases, if you see a card you like, be sure to speak with a customer service representative to ensure you understand the full scope of benefits available to you as a member of the military.
|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|