Best Credit Cards
for Military Personnel
By Michael Dolen, CreditCardForum.com
High interest rates.
Unaccommodating customer service.
These are traits which many people associate with their credit cards. However, if you live in a military household, there are some great alternatives – financial institutions which cater specifically to those in the armed forces.
In this article, we'll review some of the offerings from the three most popular military financial institutions.
Pentagon Federal Credit Union
Known as PenFed for short, this is actually the nation’s second-largest credit union and serves over one million members.
If you typically carry a balance on your credit cards, the PenFed Promise Visa is worth looking into. It carries a low rate (9.99% at time of writing). There are no foreign transaction fees, which is definitely a rare feature for a card like this which has no annual fee.
This benefit is extremely helpful if you are deployed overseas – by not paying extra for international purchases, you will be avoiding that annoying 2-3% surcharge that most other credit cards charge.
On the other hand, if you never carry a balance and use your credit card to earn rewards, then PenFed offers a couple of excellent choices:
- Their Platinum Cash Rewards card gives an unlimited 5% cash back on gas when you pay at the pump (you won’t find a better program for fuel rewards, anywhere).
- Their Premium Travel Rewards card gives 5x points on airfare purchases and comes with a number of built-in benefits for travel, including various insurance benefits – and if you spend enough per year – free access to airport lounges.
Probably the most well-known of the military-oriented financial institutions, USAA offers a wide selection of credit cards, some of which can be quite useful if you are an active military member.
Amongst all their card offers, my personal favorite is their Active Military MasterCard. Why? Because if you are carrying a balance during a qualified military campaign, 100% of your finance charges will be rebated to your account.
Furthermore, during deployment/PCS you will receive a lower interest rate for up to 12 months. Last but not least, they also waive foreign transaction fees when you are deployed.
USAA’s rewards programs have a few drawbacks you should be aware of. Most notably, USAA offers tiered rewards – the amount you earn depends on how much you spend per year. For example, with the USAA Cash Rewards MasterCard, your first $5,000 in annual purchases will only earn 0.45%. To earn 1.00% or higher, you must spend $10,000 or more annually. For this reason, the USAA reward programs are best suited for larger spenders versus the average Joe or Jane (who would probably be better off with one of the PenFed reward cards instead).
Editor’s note: This can probably be explained by the fact that, until just recently, USAA membership was limited exclusively to military officers. USAA has now opened its membership to anyone who has honorably served, making its products and services available to hundreds of thousands of enlisted personnel and veterans. If you haven’t yet become a member, we recommend you do so.
Navy Federal Credit Union
Despite the name, this credit union serves all branches of the military, including the Department of Defense. NFCU offers several different cards (6 at the time of writing) including secured cards, if you have bad credit and can’t get approved for a regular unsecured offer.
For balance carriers, I would recommend their basic Platinum Visa. It doesn’t give rewards – but instead – you get an APR that is at least 1% lower than their other cards. At the time of writing it came with a variable rate of 7.99% for those who qualify. It also comes with some nice benefits you may not expect on a basic no frills card, such as a free extended warranty on eligible purchases and concierge hotline.
For rewards, there are a few cards to choose from but my personal favorite is the Cash Rewards Visa. It has no annual fee and you will earn at least 1% cash back on everything. On the first $10,000 spent annually you earn 1% and anything beyond that earns 1.5%. A great choice if you are someone who always pays your bill in full each month.
After struggling with debt problems resulting from massive medical bills, Michael created CreditCardForum.com as a place where people could ask questions and get answers about credit card related topics.