I have been told that the SCRA puts a 6% interest rate cap on my debts owed before entering the service. I have some credit cards with really high rates and with late fees and service charges. Are those also reduced or do I still have to pay the higher rate?
Untitled
Yes, late fees and service charges are included in the definition of interest! In Title II, Section 527 (d) "interest" includes service charges, renewal charges, fees (late fees and others) and all other charges with the exception of some insurance charges, on your debt. Your lender will reduce your interest rate to 6% and will not be able to collect these other fees. To do so would be to charge more than the 6% cap allowed by law.
This rule applies to pre-service debt only. Charges you make on your credit card after entering the military or being called to active duty will be at the contractual rate you had agreed to initially.
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
Yes, late fees and service charges are included in the definition of interest! In 