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Military Credit Card Benefits

*As of January 2020*

For military service members and their families, credit cards can offer valuable benefits and an easy way to earn passive income.

In this article we break down:

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Why Choose Credit Cards Over Debit Cards?

Some financial advisors say the only plastic card in your wallet should be your debit card. Are they right?


Debit Cards

How are Debit cards different? For starters, debit cards are linked directly to your checking or savings accounts. These cards only allow access to the money you’ve already earned.

Debit cards are good in that they force the user to stay within budget. You’re not borrowing anything; you can only access money you already own. There’s no interest to pay, and no payments to track.

However, unlike credit cards, debit cards don’t have a great deal of fraud protection. Fraudulent charges on your debit card could be devastating to your bank account, leaving you unable to pay your mortgage or other bills. Using a credit card, on the other hand, ensures a high level of financial protection. If a credit card is compromised, the company will fight on your behalf, because it’s their money. A debit card? That’s your money, and you’ll be the one fighting to get it back.

Debit cards also lack the points and perks associated with credit cards. These incentives can be real moneymakers and cost savers when used correctly.


Credit Cards

Credit cards get a bad rap. Credit cards can cause a financial nightmare if used irresponsibly. But for users who pay off the balance every month, credit cards offer a wealth of perks and protections that debit cards can’t match. For members of the military, credit cards come with even greater incentives that can really add up over time.

First, credit cards offer significantly greater protection against financial fraud. More than 1.4 million Americans fell victim to some form of financial fraud last year, according to the Insurance Information Institute. Debit card users usually fight these cases themselves, waiting weeks or months for banks to return the lost cash. However, credit card users enjoy a greater sense of security. Federal law limits consumer liability for credit card fraud, and many companies offer $0 fraud protection.

Plus, credit card companies want your business, so they offer fantastic perks and benefits like cash back, travel incentives, and discounts. For many members of the military, credit cards are a free way to get extra cash every month. The best credit cards for active-duty military even waive annual fees and feature lower interest rates (even down to 4%).

Lighbuld, Know Before You Apply

What to Know - Before You Apply

Let’s start by stating the obvious: if you’re already in a tight spot financially, credit cards might not be the best choice. The only way to make money with credit cards is to pay off the balance every month. If you’re not financially solvent, adding a potentially high-interest credit card to the mix could be a recipe for disaster.

Before you apply for a credit card, do the following:

  • Check Your Credit Score
    Even the best rated credit cards for military members will have astronomical interest rates and low borrowing limits for applicants with low credit scores. According to 'lendedu' 670-739 is good credit, 740-799 is Very Good, and Above 800 is Excellent.  We recommend visiting their article "What is a Good Credit Score" to learn score more about How to Get a Good Credit Score, Benefits, and How Credit Scores are Calculated (payment history, length of history, current debt, new credit, & credit mix types).

    Young borrowers or those new to the credit game may first have to put down a deposit to get a credit card.  A great card to start building credit with ZERO fees is the PenFed Promise Visa Card.  Another option is to have a family member add you as an authorized user of their card. Their line of credit history can be reflected on your credit score profile. Overall, the longer you have a credit card – and pay it off – the more your credit score will increase. Over time, responsible credit card use can have a remarkably positive impact on your credit score, which helps with getting better terms on any future big purchases such as a home or car.


  • Get Out of Debt
    Many factors affect your credit score, but debt is chief among them. If you’re carrying large amounts of financial debt, pay it off before applying for an additional credit card. This will both increase your credit score and give you the ability to pay off your card every month.

    Military members have access to a variety of tools to pay off debt. Military installations offer free financial planning and budgeting courses, and some even provide financial assistance for service members in need. You can also apply for a career starter loan, a low-interest loan of up to $32,000 offered to newly commissioned military officers, cadets, or midshipmen. Military members can use this loan to pay off other debts and increase their credit scores. 


  • Avoiding Credit Card Interest Payments

Americans will pay an estimated $122 billion in credit card interest this year. Borrowing more than you pay back is a sure-fire way to end up over your head in credit card debt.

Credit cards can be a valuable source of passive income, but only when you pay them off every month. A $200 cash back perk doesn’t mean much if you’re stuck paying $500 in interest payments. The only way to get the full benefit of credit cards and their incentives is to ensure you pay off your balance without fail.  Credit card companies make money every time you swipe. So even if you never pay a dime of interest (and we hope you don’t), they are still getting paid. Therefore, credit card companies entice customers to use their card more than others you may have by offering extraordinary incentives.


Make a budget and stick to it. Know your monthly income and make sure you’re not charging more than you can pay off. Some cards may offer an introductory 0% interest rate, but those will rise eventually. Don’t get caught in the credit card interest trap.

  • Not All Points are Created Equal

A card that offers 6x the points on a category may not be better than another bank's card that offers 3x the points in the same category.  The real value becomes evident with the redemption and overall rewards program tied to each. Check out this article from Credit Karma to see which incentives are worth your time.  Also, the 'Points Guy' website offers a monthly update of point evaluations. Here is the monthly article and you can see that the American Express & Chase programs are some of the best valued, up to 2 cents per point (depending on how you redeem them).

Know before

The Best Credit Cards for Military Members

Now that we’ve established the potential benefits of credit cards, what are the best credit cards for military members? The depends on what perks you want.


Choose Your Perks

Before choosing a credit card, first decide which perks (redemption strategy) work best for you and your family.

For members of the military, credit card perks abound. Do you want cash back on every purchase? Travel benefits to complement your other commercial travel benefits? Discounts at your favorite retailers or restaurants? No matter what incentives matter most to you, chances are there is a credit card that matches your interests.

Some military members choose to open two, three, or more credit card accounts, gaining benefits from each. One card might offer cash back on gas purchases, while the other gives excellent travel perks. By knowing the perks of each card, you can juggle multiple accounts and rack in the incentives.  Be mindful that spreading your spending across too many programs will require much more time to reach your desired redemption goals vs keeping to 1 or two programs. 

Others may not enjoy getting caught up in the points game and just prefer to have 1 or 2 cash back cards to help pay off their end of month statements.  They will drive their travel point enthusiast friends crazy, but that's OK as long as the user is satisfied with their overall financial strategy. 


Our top 5 List of Great Credit Cards for Active Duty Military

We do not recommend that you should have each one. This is an intro of what's out there.  If you already had one of these cards prior to joining the service, make sure to call your institution to update your status and reference the Servicemembers Civil Relief Act, a law offering financial relief to active duty military members. Some credit card companies give servicemembers benefits above and beyond what the law requires. Check with your bank for more information about SCRA benefits.

Top 5 list

1. Chase Sapphire Reserve Card

This card offers premium rewards and excellent travel points. Plus, they waive the steep annual fee for military members!

  • Annual fee ($550) waived for active-duty military and spouses

  • 50,000 Ultimate Rewards Points when you spend $4000 in the first three months

  • $300 in annual travel credits, good for hotels, car rentals, airline tickets, and more (Yes, with the waived fee, this is a free yearly $300 credit)

  • 3X points when used for dining and travel worldwide

  • Priority Pass Lounge Access

  • $100 Global Entry or $85 TSA-Precheck credit 

    • Yes, you can use this to help cover your spouse's TSA Pre-check fee

  • 50% MORE points when redeemed for booking travel via the Chase Travel site 

    • The average american 25-34 spends about $3,400/year on eating out (even more for 34+), which would equal about $153 in travel credits for airline, hotel, and car reservations via their travel site (powered by Expedia)

  • $100 baggage delay insurance & lost baggage reimbursement

  • *New for 2020* Includes Lyft Pink Subscription & $60 DoorDash Credit

  • and much more!

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2. American Express Platinum Card

Excellent travel perks, hotel elite status, annual Uber credits and airline points, and no annual fee for active-duty military.

  • Annual fee ($550) waived for active-duty military and spouses

  • 60,000 membership rewards points when you spend $5000 in the first three months

  • 5X points on airfare and hotels

  • $200 in free Uber credits annually per cardholder

  • $200 airline credit for incidentals

  • Elite Gold Status for Hilton & Marriott Bonvoy programs

  • $100 Global Entry or $85 TSA-Precheck credit 

    • Yes, you can use this to help cover your spouse's TSA Pre-check fee

  • Entry to exclusive Centurion airport lounges + Priority Pass lounges worldwide

  • Exclusive discounts at select hotels worldwide

  • $100 Saks Avenue Credit

  • and much more!

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3. American Express Blue Cash Preferred

The best cash back credit card for everyday spending.

  • Annual fee ($95) waived for active-duty servicemembers and spouses

  • 6% cash back on grocery shopping and supermarkets (including commissaries)

  • 6% cash back on internet streaming services

  • 3% cash back on qualifying transit and travel spending

  • 3% cash back on US gas stations (including NEX and AAFES stations)

  • 1% cash back on all other purchases

  • $300 Welcome Bonus after spending $1000 in the first three months

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4. USAA Cash Back Rewards Plus

A cash back card for everyday spending, from the trusted military services bank.

  • 4% APR as long as you’re active duty

  • 5% cash back on your first $3000 on gas and military base purchases annually

  • 3% cash back on the first $3000 of grocery purchases annually

  • 1% unlimited cash back on all other transactions

  • No annual fee

  • No foreign transaction fees

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5. Capital One Quicksilver Cash Rewards Card

An excellent option for military members looking to consolidate debt and transfer with 0% APR. Great cash back credit card for service members.

Capitalone Quicksilver Rewards.JPG

After Active Duty

Eventually, it will be time to separate or retire from military service. Before separating from active duty service, you’ll have to decide whether the perks are worth the annual fee (may re-apply once you get out), or downgrade to another product.

Closing a credit card account all together could negatively impact your credit score (all of your credit history associated with that line of credit disappears). Instead, consider keeping your same line of credit, but contact the company directly to downgrade your product. For instance, if you have the Chase Sapphire Reserve card, you can downgrade to a Chase Freedom or Ultimate Freedom card, which both still participate in the same Chase Ultimate Rewards program without an annual fee. Click here for more information about product change options.

*Written in coordination with Becca, Air Force Key Spouse*

After Active

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