I almost missed the announcement. It’s bland corporate text inside a box on my USAA Visa credit-card bill of 2 July. It’s the boilerplate you always ignore while you’re scrolling to find your new balance and checking your payment date:
“Effective October 1, 2019, USAA Federal Savings Bank will be eliminating the PCS and Deployment discretionary benefits. All currently approved benefits will continue through expiration.”
“Wait, what?”
I scrolled back up to read the text again: “Permanent Change of Station” and deployment discretionary benefits.
Um, I’m a military retiree. I sure hope I don’t have any PCS or deployment discretionary benefits. Why would USAA notify me about that?
And why is it on a credit card statement but nowhere else? I usually keep up with USAA news (and rumors) yet I hadn’t heard anything about this one yet. What about a press release, or a link on their website, or an e-mail, or even a notification from their app?
Credit Cards With Deployment Benefits
I searched USAA’s website (so that you don’t have to) and found the pamphlet “Preparing For Deployment & Returning Home.” Page 6 has the paragraph:
“USAA Bank credit cards provide special rates that you may qualify for when you deploy or PCS.”
Way back in the fine print of the footnotes, I found more info in #6:
“To receive the special active duty benefits, you must tell us when you enter active duty or start a deployment/PCS. SCRA rate will not apply unless you notify us that you have entered into active military service. The SCRA rate will apply only to balances made before commencement of active duty and will last until the end of your active duty period. We will notify you 45 days in advance before the SCRA rate ends. Thereafter, the variable Regular APR will apply. For all other benefits, we must receive notice within 365 days after your PCS report date or return from deployment. We reserve the right to require documentation.”
Yeah, I know: “Hey Nords, what the heck is the SCRA?” I get the question every week, and you’d be surprised how many military families haven’t heard of it.
The Servicemembers Civil Relief Act
The SCRA is a federal law which (among other things) reduces the interest rate on your debts while you’re on active duty. The catch is that those debts have to be incurred before you started the active duty. That means “before you entered the military” or “before you started active duty orders of at least 30 days with the Reserves or National Guard.”
Here’s a summary of the SCRA law’s benefits:
- A 6% cap on interest rates for pre-service debt and obligations.
- Delay of all legal civil actions during time of war.
- Required court actions before servicemembers or families can be evicted from a rental property (if the rent is less than a certain amount).
- Termination of pre-service residential leases, or termination of leases in the event of a Permanent Change of Station or deployment longer than 90 days.
- Termination of auto leases (and some other contracts, like cell phones) under certain circumstances.
- Guard and Reserve benefits.
Here’s a little history behind the SCRA and more clarification of some details.
And finally, here’s the federal law behind the SCRA.
(Side note: If you have credit card debts, see the paragraph at the end of this post about how card companies are using the SCRA for even more free money.)
Buried in another part of USAA’s website is a disclaimer:
“Effective Dec. 20, 2019, USAA will be reducing the application window for SCRA benefits from 365 days to 180 days after the date of servicemember’s termination or release from military service. All currently approved benefits will continue through expiration.”
What Are USAA’s “Discretionary Benefits”?
Well, I’ve been attending USAA conferences for nearly eight years. I know people there, and they know that I ask a lot of questions. I e-mailed a member of their Corporate Communications team, and here’s the answer:
“The discretionary benefits referenced on your statement are additional PCS and Deployment benefits offered for credit cards and include: reduced interest rates for current balances, new purchases and cash advances, as well as waived balance transfer/convenience check fees for 12 months from date of processing. These are unrelated to SCRA and will be discontinued effective October 1, 2019. We will communicate these changes more broadly closer to the effective date.
The Servicemember Civil Relief Act (SCRA) benefits we provide have not changed. While legal parameters require SCRA interest rates to be capped at 6%, USAA will continue to offer a 4% interest rate cap on SCRA eligible products and extend the benefit for an additional 12 months after the member is released from active duty service.
USAA is committed to protecting our military member’s financial security, including complying with SCRA and going above and beyond the legal requirement on SCRA protections.”
I’ll update this post as USAA provides more info.
P.S.: How Credit-Card Companies Exceed The SCRA Law For Even More Free Money
This is an entirely separate offer from some credit card companies. It exceeds (and might go far beyond) the SCRA requirements. The offers are perpetually changing, but essentially you’re refunded most of the interest that you’ve paid during active duty. For a few military families carrying significant card debts, it’s added up to thousands of dollars.
Some card companies will even apply it to debt incurred after starting active duty. This is not required by the SCRA, but it’s a “Thank you for your service!” offer from the card company.
When the offers started in late 2015, it was rumored to be the industry’s crowdsourced tactic of building their database of military cardholders. (See page 13 of that PDF link.) They were required to identify their military customers (or pay query fees to the Defense Manpower Data Center to access DoD’s database) in order to comply with the credit-card provisions of the Military Lending Act which took effect in late 2017.
The list of companies (including USAA) offering these benefits (and their terms) is always changing. You can start with that blog post but the bottom line is: contact the card company and ask what they can do for you.
Related articles:
Protecting military with the SCRA
Servicemembers Civil Relief Act – Military Members Can Receive Reduced Interest Rates (from The Military Wallet website)
13 Credit Card Companies That Provide CASH Refunds to Service Members Under The SCRA
Will The Military Pay Off Your Student Loans?
You should include that some states have their own SCRA laws (key provisional state). Some of their laws expand the SCRA benefit to debt incurred during/after the active duty, to spouses, etc. Ohio is one example, if you want to look at their law.
Thanks, Nathan, good point!