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  Home >> Lending >> Credit Cards  
SCRA Rate Relief

I am in the Army Reserve and am being called to active duty. Will Servicemembers Civil Relief Act apply to my credit card debt?


Absolutely, just as it would most other debt. The Servicemembers Civil Relief Act affords protections to reservists called to active duty, individuals who enlist in the service, and certain others. One protection is that an interest rate on a debt will not exceed 6% Annual Percentage Rate.

The amount you owe when you are called to active duty will be subject to the 6% APR, however charges you make afterward are not. The idea is that when you are called to active duty, your income may decrease and paying bills can be more difficult. Having your rate locked at 6% can help, but once called up, you know your income and what you can afford. You are expected to handle your finances responsibly. If you couldn't afford the payments on a new charge with what you (now) earn, you shouldn't make the charge. So the relief under the SCRA applies only to debt which existed when you went active.

Published on BankingQuestions.com 7/28/06