The credit card industry is a tricky investment. That’s why it’s important to do your research before opening a new account. If you’re an active military member or veteran, the laws can be complicated.
Military Lending Act
The Military Lending Act (MLA) protects military members and their families from predatory lenders. The MLA restricts loan renewals, rollovers, and refinancing as well.
The MLA was established in 2006. It was enacted to prevent lenders from taking advantage of military members. This act keeps service-members safe.
Credit cards for military members are a big part of the MLA. The act limits interest rates and fees on all types of credit products. This includes payday loans, car title loans, and prepaid cards.
The Military Annual Percentage Rate (MAPR) is an important part of the MLA. It is the limit set on the annual percentage rate for credit. Including any costs or fees associated with the loan, the MAPR cannot be greater than 36%.
Who Is Eligible for Military Credit Cards?
Military members who are on active duty, in a drilling status, or deployed can apply for a credit card.
Military spouses and family members may also qualify for a credit card. This is a great benefit for families because it’s safe and reliable.
A spouse or family member can apply if the service member has honorably served.
How Does it Work Exactly?
Credit cards for military members are designed for safety. They’re a great option because they have low interest rates and fees.
Military credit cards typically have a lower APR than civilian credit cards. This is because military members have more protections under the MLA.
Military credit cards may also come with rewards. This is a great way to earn points or cash back on frequent purchases.
How to Get a Military Credit Card
Getting a military credit card is easy. Military members can apply at their installation finance office. They will need to bring identification and proof of income.
Service members’ spouses or family members can also apply for military credit cards. They will need the sponsor’s active duty status and proof of income.
Financial institutions like USAA and Navy Federal Credit Union (NFCU) offer military credit cards. These are safe, reliable, and they come with great benefits.
The Navy Federal Credit Union is a great option for service members. Their credit card rewards are some of the best in the industry.
Top Tips for Military Member Credit Cards
- Don’t miss your payments. Missing a payment can mean higher interest rates, fees, and penalties. Late or missed credit card payments are also reported to credit bureaus.
- Don’t let your debt get out of control. It’s important to pay off high interest rate balances first to reduce your overall debt.
- Don’t close old credit card accounts. This can actually hurt your credit score. This will help your credit history and score stay strong.
- Take advantage of the military credit card benefits. Military credit cards can come with low interest rates, low fees, and great rewards.
- Be sure to read the terms and conditions of your credit card agreement. This will help you understand how your military credit card works.