If you’re in the military and have received orders for a permanent change of station, you may want to move yourself instead of having the government do it for you. It’s less convenient, but it’s also a great opportunity to earn card rewards and other perks. Read on for advice from former service members and credit card experts.
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If you’re in the military and have received orders for a permanent change of station, you may want to move yourself and use a card to pay for your expenses, rather than have the government move your belongings for you.
Opting for a personally procured move (PPM) is less convenient. However, it can also be a great opportunity to earn card rewards and other perks, say experts and former service members.
Moving four bedrooms worth of furniture from Pensacola, Florida, to San Diego, for example, could cost as much as $7,000 or more, according to the Department of Defense’s PPM estimator. If you charged those purchases to a rewards card, you could potentially earn several hundred dollars’ worth of cash back or free travel.
You’ll also get to keep whatever money is left over if you spend less than the government budgeted for your reimbursement, potentially making your move even more rewarding.
Just make sure you pay off your purchases in full each month in order to avoid paying interest – or use a card with a promotional 0 percent APR.
“Cash back and point rewards are great, but not at the cost of ongoing payments and high interest rates,” says Ryan Guina, an Air Force veteran and founder of The Military Wallet.
Here are some tips for making the most of your rewards cards:
1. Create a budget well before you book your reservations
The last thing you want to do is overcharge and complete your move with more debt than you can afford. So do your research beforehand and set a comprehensive budget for your move, says Carlos Perez, a former Army colonel and COO of AAFMAA.
“Budgeting is a basic building block of financial security,” he said.
Before you go, set a budget for everything from moving supplies and truck rentals to food, lodging and incidental expenses. Also include your everyday expenses, such as car insurance or other loan payments.
“There are aspects of your budget that don’t stop just because you’re moving,” Perez said.
Once you’ve rounded up your expenses, meet with your move counselor and make sure you know what’s eligible for reimbursement and what’s not, says Richard Kerr, a veteran naval officer and founder of the Award Travel 101 group.
“Never assume anything,” he said. The last thing you want is to be surprised when you find out that a detour or other change-in-plans isn’t covered.
When Kerr opted for a PPM, he typed up a memo to make sure he knew exactly what to expect.
“We asked every single question to the move counselor, even if we thought it was silly,” he said.
Once you’ve settled on a plan, be sure to file the right paperwork, says Guina. The Military Wallet has a helpful guide on what you need to file before and after your move.
Then be prepared to wait a while before you receive your full reimbursement.
“The military is going to take a few months to reimburse you,” says Kerr.
The government will reimburse you for 95 percent of what it estimates it would have cost to move you to your new destination. However, it will only give you up to 60 percent upfront.
See related: Credit guide for military members and their families
2. If your budget falls short, choose a 0 percent APR card or other interest-free option
Since you’re getting reimbursed, it may seem like a no-brainer to charge all of your moving expenses onto the rewards cards that you already use most. But you could get yourself into trouble if you carry a balance on those cards for more than 30 days.
“It can be some time before you see that money again,” says Melissa Lagerquist, a military spouse and author of The Frugirl blog. “If you are using a credit card and you don’t have the cash to pay the bill at the end of the month, you may end up incurring interest on those charges.”
That, in turn, could negate the value of using a rewards card in the first place, says Justin Zeidman, head of credit cards at Navy Federal Credit Union.
“The cost of interest is going to eat into the rewards you earn pretty quick,” he said.
Rather than carry a balance on an existing card, you’d be better off applying for a brand-new card with a promotional APR.
“Promotional purchase APRs are a great way to help tide you over as you wait for your reimbursement to come without having to pay interest out of pocket,” Zeidman said.
You don’t have to give up earning rewards to get promotional financing. Many of the best rewards cards offer a promotional APR for at least 12 to 15 months.
Once you’ve created a budget, figure out how much you can afford to pay off immediately and how much you’ll have to borrow. Then use a flat-rate cash back card with a 0 percent APR for those excess purchases you know won’t earn a bonus on other cards – such as your truck rental or packing supplies.
The Chase Freedom Unlimited card, for example, is currently offering 3 percent cash back on your first $20,000 worth of purchases in your first year and a 0 percent APR for 15 months on purchases and balance transfers (then 17.24% – 25.99% variable APR). After you’ve spent $20,000 or after your first year, you’ll earn a flat 1.5 percent cash back on every purchase.
If you’d rather not apply for a new card, you may also be able to qualify for the advanced pay option to cover those expenses you can’t pay off in full, says Perez.
3. Take advantage of big sign-up bonuses
To really maximize your move-related spending, one of the most lucrative things you can do is apply for a brand-new card with a large sign-up bonus. Many cards with big bonuses require a ton of spending in a short time period – which should be relatively easy for you when you’re charging so many move-related purchases.
Since you’re a member of the military, you may even be able to take advantage of a premium card’s ultrahigh bonus without having to pay a big annual fee.
Some issuers, such as American Express and Chase, will waive a premium card’s annual fee for active duty service members, says Kerr – giving you access to some of the biggest sign-up bonuses on the market.
For example, the Platinum Card® from American Express currently offers a 60,000-point welcome bonus if you spend $5,000 in the card’s first three months. Meanwhile, the Chase Sapphire Reserve card offers 50,000 bonus points if you charge $4,000 in the card’s first three months.
If you decide to apply for more than one card, you can also earn substantial sign-up bonuses on no-annual fee credit cards. Just be careful not to apply for too many cards at once, warns Beverly Harzog, a credit card expert at U.S. News and World Report.
Issuers may see multiple inquiries as a red flag and deny your application. Big balances on your cards can also temporarily depress your credit score under the credit utilization scoring factor.
Before you apply for any new credit card, read the fine print so you fully understand what you’re getting into, says Russell MacKaron, general manager of USAA’s Card Experiences group.
“Know all the terms and conditions and fees and know what is your spending and payment behavior,” says MacKaron. “Rewards cards are great for people who are going to pay that balance off, but they do tend to have higher APRs.”
4. Match your card to your expenses
If you already have a selection of rewards cards to choose from – or if you have enough time to plan ahead and spread out your applications – you’ll also want to think about how you can align the cards with your spending during the move.
“Use credit cards that offer the highest payout in specific categories,” says Guina.
For example, if you plan to eat out frequently, you’ll want to use whatever card offers the highest bonus on restaurant purchases. Or, if you’re driving to your new destination, you can use whichever card offers a big gas bonus.
The Navy Federal More Rewards American Express card, for example, offers three points on gas and grocery purchases, while the Navy Federal Credit Union Go Rewards credit card offers three points on restaurants.
Meanwhile, the USAA® Cashback Rewards Plus American Express® Card offers 5 percent cash back on up to $3,000 worth of gas and military base purchases (after that it’s 1 percent). USAA’s Rewards American Express Card also offers 3 points per dollar spent on dining.
Depending on the time of year, a card with a rotating bonus can also come in handy, says Guina, since it may give you the chance to earn up to 5 percent back on purchases you were already planning to make.
For example, the Discover it® Cash Back card currently offers 5 percent cash back on gas until June and 5 percent back on dining from July to September (on up to $1,500 in combined quarterly purchases, then 1%) – after you activate the bonus categories .
“Plan your trip to maximize rewards,” Guina says.
For example, if you own a hotel card, booking all your reservations at the same chain could earn you a ton of extra points.
Also, look for discounts and other promotions that can help you save money and earn additional rewards. For example, the Capital One Venture Rewards Credit Card is currently offering 10 miles for every dollar you spend on rooms you book and pay for through Hotels.com/venture.
Finally, don’t forget about side benefits that can help you save money if your trip goes awry. Check to see what travel insurance benefits your credit cards offer and use the cards with the strongest benefits to pay for car rentals, flights or other travel expenses.
You could earn a ton of rewards just by using a card on move-related purchases. But charge strategically: If you aren’t going to be reimbursed for an expense, and can’t afford to pay it off quickly, then it’s probably not worth charging it to a high APR card.