Military servicemembers don’t look for the same credit card attributes as their civilian counterparts do: they face a unique set of personal finance challenges, but are also entitled to the benefits of their service. So finding the right credit card for a member of our armed forces involves a slightly different selection process.
They make quite a few purchases abroad, but unlike a business traveler, they don’t necessarily place a premium on earning airline miles. They might be more likely to need a cash advance in case of an emergency. And they may need an extended grace period, if they’re deployed when a credit card bill comes in. Fortunately, a number of military credit unions reach out to servicemembers, offering benefits tailored to soldiers and sailors.
What to look for in a credit card
Much of the basic card-choosing advice applies to both military personnel and civilians. If you carry a balance from month to month, you should look for a card with a low interest rate. If you have a large amount of debt, look for a balance transfer card. However, if debt isn’t a problem, look for good rewards cards, which give 1-2% back but usually come with a higher APR.
Some other qualities, though, make military credit cards unique. For those deployed overseas, a card with no foreign transaction fee is critical. Many credit cards, especially those issued by for-profit banks, charge around 3% of the transaction. Visa charges banks that carry its cards a 1% fee on foreign transactions, so many credit unions will simply pass along that fee to the cardholders without marking it up like traditional banks. Still others, though, will swallow the fee themselves and charge nothing for foreign transactions.
A military credit card should also offer an additional grace period, beyond the bill’s due date. A standard grace period is the time between when your statement closes and when you have to pay your bill. On top of that, many military credit unions offer an extra grace period between when the bill is due and when the penalty interest rate or late fee kicks in. A hard-and-fast deadline is another unnecessary stressor for a servicemember on duty. Better yet, find a credit card with no penalty APR – many credit unions charge a flat late fee, usually under $25, in lieu of ratcheting up the interest rate to 25.99% or higher.
Finally, look for a generally low interest rate. You never know when you’ll need to run up a balance. Most military credit unions offer rates below 6%, while the nationwide average for people with excellent credit hovers around 11%.
Our military credit card picks
Visa Platinum from Sea West Coast Guard Credit Union
Who can qualify: Members of the Coast Guard, their families, and employees of various businesses in the Southwest.
The card: The Visa Platinum from Sea West Coast Guard is pretty simple: no annual fee, no rewards, and a great interest rate of 4.25%. There’s also no balance transfer fee – most cards charge 3-5%.
The fine print: It actually shouldn’t be called fine print: this card doesn’t come with the usual hidden fees. First off, there’s no penalty APR. If you’re late, you’ll be charged a flat $15 fee rather than the hair-trigger 29.99% interest rate you’d usually see. Second, the foreign transaction fee is only the 1% that Visa charges. And finally, the card ranks well in cash advances. Most banks will charge a 3-5% cash advance fee as well as a 29.99% interest rate. Sea West, on the other hand, doesn’t charge a cash advance fee at all, and assesses the same 4.25% interest rate on cash advances as it does on regular balances.
Visa Platinum from Kirtland Federal Credit Union
Who can qualify: More or less anyone affiliated with the Kirtland Air Force Base in New Mexico, or those who work for a wide range of affiliated employers including VFW District II, Army & Air Force Exchange Services, and the New Mexico Department of the Military Order of the Purple Heart.
The card: The Platinum has a flat, low minimum interest rate of 5%, as well as 1% rewards. The rewards program offers three options to choose from:
- • 0.5% cash back on the first $2,500 in purchases per year, 0.75% cash back on the next $2,500, 1% cash back up to $15,000, and 1.25% after that
- • One Credit Union Rewards Point per dollar, which can be redeemed for plane tickets, hotel stays and more. You will receive 5,000 points for your first purchase
- • A 0.5% discount on the card’s interest rate
The Visa Platinum makes our list of the top military credit cards because of its flexibility. To begin with, not many credit cards offer such low interest rates and rewards, let alone offering options. Someone with excellent credit can score a rate as low as 4.5% if she forgoes rewards, and someone with good credit can snag 5.5% even if she does want rewards. The lowest interest rate is more than 9% better than most rewards credit cards – a pretty spectacular deal.
The fine print: Like Sea West, Kirtland really shouldn’t be hiding the fact that it isn’t hiding anything. There’s no foreign transaction fee whatsoever, no penalty APR, and a low $25 late fee. Cash advances are assessed the same interest rate as purchases, and the cash advance fee is only 1%.
The Flagship Rewards from Navy Federal Credit Union
Who can qualify: Anyone serving in the Army, Navy, Air Force Marine Corps or Department of Defense, and their families
The card: The first two military credit cards we listed stood out for their low interest rates; Navy Federal makes the list with great rewards. While there’s a $49 annual fee, the card has a base rewards rate of 1 point per dollar spent, and each point is worth 2 cents if redeemed for airline tickets. So, you could redeem 15,000 points for $150 in merchandise or $300 in plane tickets. The minimum interest rate is a pretty low 9.99% – the average rewards card rate is 14%.
The fine print: The Flagship Rewards doesn’t stack up as well as the other two in terms of “gotcha” fees. They do assess a penalty APR, of 18%. The late fee is a fairly low $20, though, and there’s no cash advance fee and only a 1% foreign transaction fee.