Banking and credit card deals only military can get

Serving in the military brings unique financial challenges, but also perks and protections.

Debt can pose a big problem for military members, but there are tools and free services that can help, says Lacey Langford, a military financial coach who served in the U.S Air Force.

There’s also a big opportunity for members of the military to save money by keeping an eagle eye out for discounts and perks that aren’t well publicized, says Robert Rampton, an active duty military member and author of Discounts-Deals4Military.com, a military savings and rewards blog.

“You can save thousands of dollars a year,” he says.

Here’s a military guide to getting deals and discounts from your bank, defending yourself against debt and reaping maximum rewards.

Banking benefits for the military

There are banking deals and credit cards tailored to those in the armed services.

Some banks will lower or waive credit card annual fees, as well as charges on checking accounts and other products, but many in the military aren’t aware of this opportunity to save, Rampton says.

Army officer Glenn Goddard, author of The Military Frequent Flyer blog at Boarding Area, writes that he got Barclaycard to waive the jaw-dropping $995 annual fee on the gold-plated luxury MasterCard Gold Card because he is active duty and had not had the card previously. “This is huge!” he writes, noting that the card comes with an array of perks, including a $200 annual airline travel credit. Tip: call any card company and ask to speak to their military benefits department to see if they waive annual fees or offer other benefits.

On banking, the Chase Military Banking Benefits program offers current service members and veterans a premier plus checking account with no minimum balance and no $25 monthly service fee. The account also comes with a slew of extra perks, including a free safe deposit box. If you set up direct deposit of your military pay, Chase will throw in other bonuses, including waiving the Chase fee on non-Chase ATM transactions.

The U.S. Bank military program, meanwhile, offers current and former service members their choice of checking account with no minimum balance or monthly fee, plus free checks, free money orders and free overdraft protection transfers.

These discounts can add up, Rampton says. In fact, a waived monthly fee alone can save military members $300 or more every year.

“Many military members don’t have a huge paycheck, and every dollar counts,” he says.

Better credit-card terms

Getting a credit card specifically geared toward military service members, and using it wisely, also can help you guard your money. For example, PenFed Credit Union offers the PenFed Defender Visa Signature Credit Card, available only to members of the military, National Guard, Reserves and honorably discharged veterans. Rewards cards usually don’t offer low interest, but this card give you 1.5 percent cash back plus a 10.49 percent APR on both purchases and cash advances.

And USAA, a financial institution open only to active and former military and their families, offers the Cashback Rewards Plus American Express Card that gives you five percent cash back on your first $3,000 in gas and military base purchases every year, and two percent on your first $3,000 in groceries. After that, you earn one percent cash back on all purchases.

Rampton recently got the USAA Limitless CashBack Rewards Visa Signature Card, which offers a highly competitive 2.5 percent cash back on purchases with no caps or limits. The only catch: to get the card, you need to set up a monthly direct deposit of at least $1,000 into a USAA Bank checking account. The card beats many others that offer only one or two percent cash back, he says.

However, Langford warns military members to watch out for the MilitaryStar Card, which offers 0 percent promotional deals and discounts but reports delinquent account directly to your commander.

“If you think you might ever be late on a bill, this might not be the card for you,” she says.

Help for military members in debt

Ideally, you’ll take advantage of discounts, save money and avoid debt. However, if you already have debt or you fall on hard times, assistance is available.

Unfortunately, many military service members face debt. A military financial literacy survey by the National Foundation for Credit Counseling found that 58 percent of military members carried some credit card debt from month to month, compared with 34 percent of the general population. Service members are also three times as likely as to have missed a credit card payment in the previous year, and twice as likely to have taken a credit card cash advance.

Coping with the stresses of deployment can trigger both a military member and a military spouse to overspend, Langford says.

“That’s why it’s essential to have a financial plan for before, during and after deployment,” she says, adding that military members can take advantage of free financial counseling available on most military installations.

It’s a good idea to seek help immediately for any financial problems, which, if they get out of hand, can cause some military members to lose their security clearance and subsequently their jobs, Langford says, adding that she encounters the problem frequently in her military money coaching.

It’s also important to learn the ins and outs of protections offered to members of the military. For example, the Military Lending Act shields active duty military members and their dependents from payday and other predatory lenders by capping loan APRs at 36 percent. The rate must include finance charges and add-on products, and lenders can’t charge you prepayment penalties. However, credit card companies do not have to follow this law until October 3, 2017.

Another important law, the Servicemembers Civil Relief Act (SCRA), protects military service members and reservists and National guard members from high interest on previously incurred debts while they’re on active duty.

During that time, the SCRA limits to 6 percent the interest credit card, car loans, student loans and other debt incurred before joining the military. The monthly payment must be reduced accordingly, and that extra interest must be permanently forgiven, not collected after active duty ends.

Some companies voluntarily lower interest rates even further for active duty service members, Langford says. For example, USAA lowers the interest rate on credit cards to 4 percent.

If you’re going on active duty, contact your credit card companies and other lenders in writing to inform them of your status and request the rate reduction, Langford says.

“You may have to fax them a copy of your orders,” she says.

Military members also need to be on the alert for discounts and perks beyond banks and credit cards, Rampton says. Just by watching for deals and asking, you can get price breaks on everything from appliances to sneakers to vehicles. In fact, Rampton recently got $1,000 off a new Ford truck.

“These discounts really help, especially if you consider the frequency of moving and all the stuff that pops up when you’re in the military,” Langford says.

 
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Barclay changed their SCRA benefits. They now stick strictly to the minimum requirements by law. That means they no longer waive fees. Amex and Capital One still do however. The PenFed Defender is available to all members, not just service members.