The average credit card interest rate is over 20%. If you're on active duty with credit cards you opened before service, you're legally entitled to have that rate capped at 6%.

But here's what the credit card companies won't tell you: they're hoping you never ask.

The SCRA Credit Card Rate Cap

Under the Servicemembers Civil Relief Act, credit card debt incurred before active duty is capped at 6% interest—including fees.

This applies to:

  • All major credit cards (Visa, Mastercard, Amex, Discover)
  • Store credit cards
  • Any revolving credit account opened before active duty

The Real Math: Why This Matters

Let's say you have $10,000 in credit card debt at 22% APR:

At 22% APR: $2,200/year in interest

At 6% SCRA cap: $600/year in interest

Annual savings: $1,600

Over a 4-year enlistment with that same balance, you'd save $6,400 in interest charges.

Now multiply that by every credit card you have.

What Banks Don't Tell You

1. They Should Apply It Automatically—But Often Don't

Many banks can verify your military status through the DMDC database. Legally, they should proactively apply the rate cap. In reality, most wait for you to request it.

2. You're Entitled to Retroactive Refunds

If you've been on active duty for months or years without the rate cap, you can request a refund of all excess interest charged since your active duty date.

This isn't a "goodwill gesture"—it's your legal right.

3. The Cap Applies to Fees Too

The 6% cap includes interest AND certain fees. Annual fees, finance charges, and service charges above the 6% threshold must be forgiven.

4. It Applies Even If You're Carrying a Balance by Choice

Some banks suggest the rate cap only applies if you "can't afford" to pay. Wrong. It applies regardless of your financial situation.

How to Request the SCRA Rate Cap

Step 1: List All Your Credit Cards

Include every card you opened before going on active duty, even if the balance is small.

Step 2: Contact Each Issuer

Call the number on the back of each card and say:

"I'm an active duty service member and I'd like to request the SCRA 6% interest rate cap on my account."

Ask to speak with their military benefits or SCRA department if the representative isn't helpful.

Step 3: Follow Up in Writing

Send a written request via certified mail that includes:

  • Your account number
  • Request for 6% rate cap under SCRA (50 U.S.C. § 3937)
  • Copy of your military orders
  • Request for refund of excess interest since active duty date

Step 4: Verify the Change

Check your next statement to confirm:

  • Interest rate is now 6% or lower
  • Any refund was applied to your balance

Common Bank Tactics (And How to Counter)

"We need 90 days of orders"
The law doesn't require this. Submit your orders and insist on the rate cap.

"The rate cap doesn't apply to your account type"
If it's a pre-service debt, it's covered. Cite the statute: 50 U.S.C. § 3937.

"We can only apply it going forward"
Wrong. Request retroactive refund of excess interest.

"You have to be deployed"
Active duty status is all that's required. Deployment is not necessary.

"We'll put you on a payment plan instead"
The rate cap is your legal right, not a negotiation. Insist on the rate cap AND any payment plan benefits they offer.

What If They Don't Comply?

If a credit card company refuses to honor your SCRA rights:

  1. Escalate internally to their compliance or legal department
  2. File a CFPB complaint at consumerfinance.gov
  3. Contact your JAG office for legal assistance
  4. Report to your state attorney general

Banks take SCRA violations seriously because the penalties are severe—including actual damages, statutory damages, and attorney's fees.

Don't Forget These Cards

Service members often forget about:

  • Store cards (Target, Amazon, Best Buy, etc.)
  • Gas station cards
  • Cards with zero balance (apply the rate cap anyway—it'll be there when you need it)
  • Cards in your spouse's name with you as authorized user

The Bottom Line

Credit card companies make billions in interest charges. They're not going to volunteer to charge you less.

But the law says they must. Every month you don't claim this benefit is money you're leaving on the table.

You earned these protections through your service. Use them.