SCRA and MLA Credit Card Benefits: What the Law Guarantees, What Issuers Add, and the Timing Rule That Decides Both

Most of what you have heard about "free annual fees for military" is true, partly. Two federal laws sit behind it, they cover different accounts, and the one that actually waives fees only applies to cards you opened before you entered service. Understanding which law covers which card is the whole game, so this article starts with the statutes themselves and then shows what three large issuers publish on top of them.

SCRA: the 6% cap on what you owed before service

The Servicemembers Civil Relief Act, at 50 U.S.C. § 3937(a)(1), says an obligation "bearing interest at a rate in excess of 6 percent per year that is incurred by a servicemember… before the servicemember enters military service shall not bear interest at a rate in excess of 6 percent" during the period of military service. For a mortgage the cap runs one year past service; for everything else, including credit cards, it runs for the length of service.

Three details in the statute do the real work:

• The excess is forgiven, not deferred. § 3937(a)(2): interest above 6% "that would otherwise be incurred but for the prohibition… is forgiven," and § 3937(a)(3) requires the periodic payment to be reduced by the forgiven amount. The lender cannot bank it and collect later.
• "Interest" includes fees. § 3937(d)(1) defines interest to include "service charges, renewal charges, fees, or any other charges (except bona fide insurance)." This is why a card's annual fee disappears under SCRA: the fee is interest, and the total is capped at 6%.
• You have to ask, but the clock is generous. § 3937(b)(1): you give the creditor written notice and a copy of your orders "not later than 180 days after the date of the servicemember's termination or release from military service," and the relief is applied retroactively to the date you entered service. Creditors may also verify status themselves through the Defense Manpower Data Center.

MLA: the 36% ceiling on credit you open during service

The Military Lending Act, 10 U.S.C. § 987(b), says a creditor "may not impose an annual percentage rate of interest greater than 36 percent with respect to the consumer credit extended to a covered member or a dependent of a covered member." A covered member is on active duty under orders that do not specify 30 days or less, or on active Guard and Reserve duty (§ 987(i)(1)); dependents are covered too (§ 987(i)(2)). The rate is the Military Annual Percentage Rate, which folds in credit-insurance premiums, ancillary-product fees and most participation fees, which is what makes it a true all-in ceiling.

What the MLA does not do: it does not cap a credit card at 6%, and it does not waive annual fees. Thirty-six percent is far above any mainstream card's APR, so for credit cards the MLA is mostly a floor of protection, not a discount. Any annual-fee waiver on an account opened during service is the issuer's policy, not the law, and policies differ.

What the issuers publish

Below is only what each issuer states on its own site, quoted or closely paraphrased. Where an issuer publishes nothing specific, the table says so rather than repeating what a blog claims.

Who qualifies, and for which accounts

• SCRA: the servicemember, for obligations incurred before entering military service. Reservists and Guard members are covered from the date of their orders to active duty; Amex applies relief retroactively to that "order to" date.
• MLA: covered members on active duty under orders longer than 30 days, or on active Guard and Reserve duty, and their dependents (§ 987(i)). That is the law that reaches a spouse's own card opened during the member's service.
• An account opened while already on active duty is not a pre-service obligation. At Amex that means MLA only — 36% MAPR, no fee waiver. Other issuers may waive fees by policy; see the table.
• Cadets, DEP and pre-commissioning: an account opened before your active-duty start date is, by definition, pre-service. Whether an issuer treats a given status as "before active duty" follows the statute's definition of military service, not the issuer's preference.

How to file, and what to check afterward

1. 1Pull your orders (or the DMDC status report; some issuers verify with DMDC and need nothing else).
2. 2Request SCRA relief on every pre-service account, not just the expensive ones — the statute forgives the excess interest on each obligation separately, and the 180-day post-service window is per account too.
3. 3Ask the issuer in writing how it treats accounts opened during service. That is the MLA bucket, and the answer is policy.
4. 4Verify on the next statement. The rate should read 6% or lower, fees should be absent or credited, and at Amex the change lands within two billing cycles. Our SCRA interest-cap calculator shows what the statement should say, and the LES auditor covers the pay side if a deployment or PCS moved your dates.
5. 5Keep the confirmation. If a fee is billed "outside a period of SCRA-eligible active duty," Amex says you are responsible for it — dates matter, and your orders are the evidence.

The bottom line

On accounts you opened before service, the SCRA caps everything — interest and fees — at 6%, forgives the rest, and applies retroactively once you ask. On accounts you open during service, the MLA caps the all-in rate at 36% and is silent on fees; any fee waiver there is the issuer's policy. Amex publishes both rules plainly, Capital One goes to 4% and zero fees on the SCRA side, and Chase tells you where to file but not what it waives. Ask each issuer in writing, check the next statement, and keep the orders.