Frequently Asked Questions
I have an existing credit card balance. Can I get any relief from the finance charges?
You have rights. As a general matter, when you enter active duty, you should notify your card issuer. The maximum interest rate you can be charged on any amount you owed before entering active-duty service is 6 percent. For this purpose, interest includes not just periodic interest charges, but also other finance charges and fees related to the debt. One such fee is an annual fee.
For members of the full-time active-duty military, SCRA protections begin the day you enter military service. For a Reservist or Guardsman, SCRA protections begin the day you receive your mobilization orders.
To get the benefit of the SCRA, you must notify your credit card company of your active-duty status in writing. You must send a written letter to the card issuer and include a copy of your orders. Include in your letter a request to reduce your interest to 6 percent while you are on active duty.
Some credit card issuers may even be willing to reduce your interest rate further than the SCRA requires.
I have been on active duty and have returned home. I just learned that I could have gotten a reduction in the interest rate on my credit card while I was on active duty. Is it too late for me to get this reduction?
You have up to 180 days after you are released from active duty to let a lender know that you were on active duty.
You should write your credit card company and send a copy of your military orders. If you do so within this 180-day time period, you are entitled to have your interest rate reduced to 6 percent. This reduction is effective for the period from the date you entered active duty through the date you were released from active-duty status.
If I ask my credit card company to reduce the interest rate on my balance while I am on active duty, can it close my account or reduce my credit line?
No. Under the law a lender cannot revoke or reduce your credit because you have exercised your right to a reduced interest rate under the Servicemembers Civil Relief Act.
If I ask my credit card company to reduce the interest rate on my balance while I am on active duty, can that hurt my credit rating?
No. It is against the law for a lender to make an adverse credit report because you exercised your rights under the Servicemembers Civil Relief Act.
Can I get any reduction in the interest rate I am charged on any new purchases I make using my credit card while I am on active duty?
The law regulates only the interest rate on amounts that you owed at the time you entered the military service or were called up to active duty.
If you make purchases with your card while on active duty, you can be charged your regular APR on this new balance. However, your card issuer must apply towards the new balance any monthly payment you make that exceeds the minimum amount due. This will reduce the total amount of interest you pay on the card.
Some credit card companies may give you a reduced interest rate on new purchases as well as on the balance you owed when you went on active duty. You should check with your credit card company to see what, if anything, it will do for you.
I believe that my rights as a service member have been violated by my credit card issuer. What should I do?
You should contact the nearest Armed Forces Legal Assistance Program office.
Dependents of servicemembers can also contact or visit local military legal assistance offices where they reside. You can get help online to find an office, whether you are within the continental United States or anywhere else worldwide. Another potential source of assistance that may be helpful even if you are no longer on active duty is the American Bar Association.