In the military? Get these credit cards.

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In the military? Get these credit cards.

I happen to know a lot of men and women in the military. Weird, huh? Anyway, this post will talk about what cards you need to have if you’re in the military.

Credit cards companies will give service members benefits based on the Servicemembers Civil Relief Act. In this act, there are certain stipulations protecting service members. In this post, we’ll cover two of them that apply to credit cards.

Interest Rate Cap
Most of them don’t apply to this site (terms to break a lease, terminate cell phone bill, etc.). However, there’s one very specific part of this act that can be HUGE for military members if utilized correctly.

§ 527. Maximum rate of interest on debts incurred before military service [Sec. 207]

(a) Interest rate limitation. (1) Limitation to 6 percent. An obligation or liability bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember, or the servicemember and the servicemember’s spouse jointly, before the servicemember enters military service shall not bear interest at a rate in excess of 6 percent – (A) during the period of military service and one year thereafter, in the case of an obligation or liability consisting of a mortgage, trust deed, or other security in the nature of a mortgage; or 15 (B) during the period of military service, in the case of any other obligation or liability.5

(Bolding and Underlining is mine)

This specific reference can apply to credit card interest. As with a lot of people in the US, many members of the military have credit card debt. Under this section, your credit card can be capped at 6% (unlike many cards that come with 15-21% interest).

Of course, there is a caveat. This interest cap is applied only to debt incurred before joining the military. Every credit card company (I can personally vouch for all of them – except discover), will change your maximum interest to 6% on charges incurred before your enlistment/oath of office and continue to keep you at a maximum of 6%.

Still following? Here’s an example: I get the Chase Sapphire Preferred and charge up $1,000 on it. A year later, I join the military, and still have a balance on my card. I call Chase and tell them I’m in the military. They run my information, get back to me in 3 weeks (they say – I got an email saying I qualified in about a week) and give me a refund of all interest that was collected in excess of 6% over that year period. I personally had hundreds of dollars refunded to me between this card and my Southwest Rapid Rewards credit card.

Furthermore, if you got these cards before you joined the military, they will be capped at 6% interest until you’re no longer in the military. Although the cap is 6%, most companies, including Chase, American Express, and Capital one, among others, will put your interest cap at only 4%. That’s AWESOME.

Waiving Annual Fees

Along with the interest cap, and not included in the terms of the SCRA (so it’s very generous!), many card companies will waive your annual fees! Along with this, some companies will waive late payment fees, over-limit fees, and returned payment fees, but we won’t talk about these, because you shouldn’t be doing any of that anyway!!

All credit cards companies will waive your annual fees for cards that were opened before you joined the military (same as above).

Now, there are some companies that go even above and beyond this general “baseline” of waived fees and 6% interest on cards prior to military enrollment.

Both Capital One and American Express will waive your annual fee on cards you got after your enrollment in the military. For example: I joined in May of 2012. I could apply for a card in July of 2013, call AMEX, and they would start waiving my annual fee, no matter the fee.

With this all said, here are the cards you need to have:

(We do not receive any compensation from any of these links!)

1.  American Express Mercedes Benz Platinum Card (the one on the right)

  • This is the mecca of cards for military members. The $475 fee is waived, and you get a plethora of benefits to include:
    • 50,000 Membership Rewards points after $3,000 spend in the first 3 months.
      • This is 10,000 points more than the normal AMEX Platinum, other than that it’s the exact same card (and the difference in fees doesn’t matter to you).
    • Airport Lounge Access – my favorite benefit of the card by far:
    • Airline Fee Credit
      • $200 in statement credits to the airline of your choice
    • Complimentary Starwood Preferred Guest Gold Status
    • $100 Mercedes Benz gift certificate
      • Kind of a strange perk for me, but my parents have a Mercedes, so I went to the dealership and bought them a MB jacket and some coffee mugs – free!
  • There are other benefits, but these listed are by far the most valuable.
  • Do keep in mind, this is a charge card, meaning you cannot carry a balance. It’s a great way to control spending and build good credit!
  • If you get no other card, this card is an absolute must for military members. IT’S FREE.

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2.  Platinum Delta SkyMiles Credit Card

  • I would say the Delta Reserve Credit Card, but that card’s major benefit is lounge access, which you’ll already get with the Amex MB Platinum!
  • Now, this is a co-branded credit card between American Express and Delta, so you are getting Delta benefits, not American Express.
  • This card comes with some decent benefits, and remember, the $195 fee is waived!
    • 35,000 Bonus SkyMiles after $1,000 spend in the first 3 months.
    • Companion Certificate
      • A domestic economy class companion ticket to use when flying Delta.
      • Renewed each year!
    • Free checked bag (but in the military, we already get free bags….)
    • Priority boarding! Unless you’re in the army and wear your uniform to the airport, this is good!

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3.  Starwood Preferred Guest Credit Card

  • Starwood points are VERY valuable, as the hotel chain has a generous award chart and these points transfer everywhere.
  • The modest $65 fee is waived.
    • 25,000 Starpoints after $5,000 in spend in 6 months.
    • Transfer to airline miles: every 20,000 points get 5,000 bonus miles
      • If you transfer 40,000 Starpoints to American Airlines miles, you’ll have 50,000.
  • If you got all/any of these cards I’ve listed thus far, this card is the one that you should put the majority of your spending on. Again, Starpoints are very valuable.

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4.  Chase Sapphire Preferred

  • I’ve spoke about this card enough and the benefits of Chase Ultimate Rewards both here and here.
  • Chase does not waive annual fees, however they will set your interest rate at 4% and the fee for this card is waived the first year ($95 after that).
    • 45,000 Ultimate Rewards points after $4,000 in spend and setting an authorized user on the account in the first 3 months.
  • I won’t go into the details (you can click on the links above), but UR points along with Starpoints mentioned above are the best points in the game. Focus all your spend on this card and card #3!

That’s it folks! I can keep going down the rabbit hole of cards, but I wanted to focus this post on cards and their benefits for military members! As you can probably tell, American Express does the very best job between card benefits and benefits for service members!

3 Comments on “In the military? Get these credit cards.

  1. Hey Joe, great blog. I am currently trying to learn everything I can about this subject. What are your thoughts on the citi prestige card? Do you think it is worth paying the annual fee for one year to get the 50000 thank you points and $500 AA credit? Also, I have read that some military personal have been able to get the annual fee waived.

    • Julian,
      I will actually tackle this questions since I have the card and Joe doesn’t. Short answer is that I think it’s worth it. I HATE paying annual fees for cards but for 1 year I think this makes sense. As you said you get a total of $500 for credits on any airline, even when buying tickets so it is kind offset there already. Also, your redemption on AA flights will be 1.6 cents per points and other flights 1.3 cents per point so you are getting more value when using them to purchase tickets than if you just had one of the thank You cards. Finally, if you fly AA often then you will have access to Admiral Clubs which I like. So in the end you give them $450 up front but you get $500 back, 50K points at a better rate and lounge access! You of course get other perks like free rounds of golf but I think it is well worth it regardless. I might be writing a post soon on how I got 140K TY points in 3 easy moves actually, we will see. In terms of the fee being waived for military I am not really sure unfortunately.

    • Hey dude,
      As far as the fee being waived it can be a little complicating. According to the Servicemembers Civil Relief Act (SCRA), credit card companies only have to waive fees for cards you had prior to active service. Some companies such as American Express take it a step further and waive all fees for all their cards for active duty members. I can tell you first hand that Citi does not, as I pay the annual fee for the AA Executive card. I have heard people here and there saying they got it waived, but I don’t know how true that is. Hope that helps man.

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