SCRA: the 6% interest cap
The Servicemembers Civil Relief Act (SCRA) lets you cap the interest on debts you took on before you entered active duty, including credit card balances, at 6% for as long as you're on active duty.
- How to ask: send your card issuer a written request with a copy of your military orders.
- When: you can ask while on active duty and up to 180 days after you're released.
- What happens: interest above 6% is forgiven, not just postponed, and overcharges back to your start of active duty generally must be refunded.
- Reservists and Guard: protection can start from the date you receive your orders.
The Military Lending Act (MLA)
The MLA protects active-duty service members and their spouses and dependents on credit opened while on active duty. Since October 2017 it has covered credit card accounts.
- The total cost of credit, called the Military Annual Percentage Rate (MAPR), can't exceed 36%. It counts interest plus most fees, such as add-on products and certain account fees. Reasonable, standard fees and late fees can be excluded.
- Lenders check a Defense Department database to see whether you're covered, so you often get MLA protection automatically.
Annual fee waivers for active duty
Several major issuers go beyond what the law requires. American Express, Chase and Capital One, among others, publish military benefits for eligible active-duty members that can include waived annual fees, sometimes even on premium travel cards. Some extend benefits to spouses.
Options for veterans and families
SCRA and MLA protections end after active duty, but veterans still have good options:
- Military-focused banks and credit unions such as USAA, Navy Federal Credit Union and PenFed offer cards to eligible veterans and family members. Membership rules vary, so check whether you qualify.
- Shop the whole market. Your credit score and income matter more than your service history for most cards, so compare broadly using our card guide.
- Use free resources. Base legal assistance offices, the Military OneSource financial counselors and your service's relief society can help with budgeting and debt.
If a lender won't cooperate
If a card issuer refuses an SCRA rate reduction or charges more than the MLA allows, contact a military legal assistance (JAG) office, your state attorney general, or file a complaint with the Consumer Financial Protection Bureau.
Official sources
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