[Update: Some offers mentioned below have expired. For current terms and conditions, please see card agreements. Disclosure: Cards from our partners are mentioned below.]
Members of our armed forces who are on active duty, and their families, are faced with many unique challenges. Thankfully, they also receive several unexpected benefits — and that includes credit cards. The blog Military Money Manual, written by an active duty member of the Air Force, has learned that American Express will waive most of its fees on all of its cards that are held by active duty members of the armed forces. I spoke with the blog’s author, who writes as Spencer and prefers not to disclose his full name as he is on active duty.
Personal Finance Challenges
According to Spencer, service members do not appear to be any more or less financially capable than civilians, but they face an entirely different set of challenges when it comes to managing their finances and credit. For example, he says new service members may not receive their first paycheck for six weeks to two months, due to the paperwork required by the massive Pentagon bureaucracy. Then, their first payment is received as a check, before direct deposit can be enabled. Other challenges to their budget include frequent relocation.
“We have to frequently pay for our moving expenses, and immediately put down two month’s of rent as a deposit, and buy new furniture, so it can easily strain our finances,” he says.
Furthermore, Spencer calculates that new enlistees earn less than minimum wage when their long duty hours are considered. Finally, he cites the massive time commitments required by military service, as well as the prospect of temporary deployments, that leave the the average service member little time to research and manage their own personal finances.
How the American Express Fee Waivers Works
Cardholders can contact American Express customer care and inform them that they are active duty military, and request fee waivers in accordance with the Servicemembers Civil Relief Act (SCRA). This act requires that banks offer an interest rate of no more than 6% on loans received before starting active duty. In addition, American Express appears to be exceeding the legal requirements in waiving all annual membership fees, overlimit fees, late payment fees, returned payment fees and statement copy request fees for service members on active duty.
Service members must supply their credentials to American Express, which then verifies that the cardholder is in fact on active duty. Spencer has also heard from other service members that American Express may even refund fees that were paid during the time the card member was on active duty.
Other Issuers That Offer Benefits
Bank of America
Bank of America will also go beyond the requirements of the SCRA. For eligible members of the armed services, the bank will waive all credit card fees, including fees for balance transfers, overdraft protection, foreign transactions, NSF, late payments, overlimit, statement copy requests and any annual fees (if applicable on the account).
Capital One also waives all credit card fees for service members such as the annual membership fee, monthly maintenance fee, past due, overlimit, balance transfer and cash advance fees. They also offer a 4% interest rate cap on eligible loans, as opposed to the 6% cap required by law, which they extend to one year beyond their separation, as opposed to the 180 days required by law.
Chase waives all credit card fees for active duty service members on accounts that were opened before going on active duty. In addition, Chase offers its Blue Star Deployment Program, which offers a 100% refund of any interest and fees charged during military deployment. In addition, Chase offers a line of credit cards for members of the military that have no annual or foreign transaction fees, and rewards that never expire.
Emily Collins, spokeswoman for Citi, says that “During active military service, service member accounts will receive a 0% APR and will not be charged such fees as balance transfer fees, annual membership fees and penalty fees such as late fees.”
According to Katie Henry, spokeswoman for Discover Financial Services, “Discover fully complies with the Servicemembers Civil Relief Act (SCRA), which for those active duty servicemembers who apply for this benefit, we will, among other things, lower their interest rate below 6%.”
U.S. Bank complies with the SCRA regarding credit card interest rates, and grants all active service members their Platinum Package benefits at no cost, which waives checking fees and annual fees on lines of credit.