Innovations and Payment Systems

Credit card issuers’ policies for active military service members


While federal law guarantees some debt relief for soldiers, many top credit card issuers ease the burden of debt for active military by offering protections significantly beyond what the law requires.

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Several of the world’s largest credit card issuers are stepping up to help ease the burden of debt for active military by offering protections that go significantly beyond the call of duty.

Going above and beyond
Several major U.S. banks extend the protections of the Servicemembers’ Civil Relief Act even further, including:

  • Bank of America: Provides 6 percent interest rate cap to spouses; eliminates fees during active duty
  • Citi: Lowers the pre-service interest rates to 0 percent APR.
  • JPMorgan Chase: Extends the 6 percent cap to purchases made during active duty; no minimum payment requirement.
  • Wachovia: Eliminates several fees, including late and over-limit fees.

Under the Servicemembers’ Civil Relief Act (SCRA), lenders must offer several protections beyond what is available for civilians, such as a cap of 6 percent on the interest rates on loans military service men and women incur prior to becoming active. Some others, however, have chosen to do more.

Citi, the world’s largest bank holding corporation, eliminates the interest on pre-service debt altogether.

“At Citi, we actually take the service member’s APR to 0 percent [on pre-service debt],” says Samuel Wang, vice president of public affairs at Citi.

JPMorgan Chase extends the 6 percent cap to a service member’s entire credit card balance, including purchases made while on active duty, and does not enforce its usual minimum payment requirement.

If servicemen and servicewomen “are current in their payments when they enter active duty, they can make no payments while deployed, and when they return, their account is reported as current,” says Chase spokeswoman Elaine Franck.

Bank of America gives service members’ spouses the same interest rate protections, says company spokeswoman Betty Riess. Under current policy, for example, the credit card rate is set at 5.9 percent for service members and for their spouses. Fees are also compressed, meaning late fees, over-limit fees and monthly fees are not applied to the account during the benefit period.

Wachovia spokeswoman Jennifer Darwin says the bank fully complies with the SCRA’s cap and also eliminates several fees for service members, including late and over-limit fees.

The 6 percent interest cap applies to any charges — including credit card debt, service charges, renewal charges, or fees — except bona fide insurance. The act specifies that in order to receive the interest rate reduction, a service member must request it in writing and include a copy of his or her military orders.

See related: Understanding how the Servicemembers’ Civil Relief Act works

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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