The Servicemembers Civil Relief Act, also known as SCRA, is a federal law that protects individuals who are entering the service, active duty members, and all other reserve and national guard service members from certain civil obligations, such as financial burdens while being in the service or in a deployed environment. The law also protects the family members of those service members.
Such protections may include:
- Credit card debts
- Mortgages on your home
- Lease terminations
- Rental and Eviction protections while deployed
The eligibility for SCRA differs for reservists and the national guard. In these cases, you are covered only for the time you are called up for active duty.
How does it affect you?
The great thing about this law is that any financial obligation you may have, such as a phone service plan, cable plan, etc, can be mitigated when you PCS or deploy. This means I can cancel my cell phone service if I know I will be deploying soon or I can get out of my home lease if I’m being stationed at a different base.
What I want to focus on in depth though, are the credit cards and their issuers. There are many credit card companies that will lower your interest to the maximum allowed, or even give you a 0%. Other companies waive the annual fees on many of their credit cards.
For example, for debt that you’ve incurred before joining the service, the SCRA Act forces these accounts to incur a maximum of 6% interest. If you were paying 18.99% to 24.99% on your credit card debt, this is huge savings. These companies will also make sure that the day that interest starts is the date you joined.
Which companies go above and beyond?
Many credit card issuers will follow the SCRA Act to the letter. For example, Chase, Citibank, and Bank of America will only apply SCRA Benefits to accounts that were opened before going into active duty or joining the military. However, there are other companies such as BarclaysCard, Capital One, and American Express that provide more than what the law has required them to do. They apply SCRA benefits to all accounts not dependent on when the accounts were created and they also waive annual fees, late fees, etc.
I can speak from experience that I was able to take full advantage of these benefits. I joined the military with some debt on a few of my credit cards. Five years later was when I found about SCRA and when I requested to apply the SCRA benefits to my account, AMEX applied them to ALL of my accounts and adjusted all the interest and the remaining balance. I ended up with a negative balance that AMEX will now be mailing me a check for.
How can you take advantage?
If you have a credit card, car loan, or mortgage that you’ve had before you joined the service, make sure to contact your banks. They will let you know how you can apply SCRA benefits, either through the internet, by mail, or by faxing in the documents needed to verify your service dates.
Do you have questions on which companies extend SCRA benefits to you? You can ask your question in the comments section below. Or if you need more information, check out this article: Credit Card Annual Fee Waivers & Other Benefits For Those On Active Duty (SCRA Benefits) at Doctor of Credit.