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First off, I am super grateful to my friend Jen for letting me in on this little secret. It has seriously changed my life! I’m not even kidding, it is such a blessing to my husband and I! It will change your life too!!
What is it exactly? The Servicemember’s Civil Relief Act. It lowers interest on credit cards and loans for active duty military families, among other things. I won’t explain the entirety of what SCRA can do, since it’s complex (like all government laws!), but instead, I recommend you check this article by MilitaryOneSource and this article from Military.com.
If you’ve followed our financial journey for any length of time, you’ll know Andy and I have 3 outstanding debts:
1) My Discover credit card, maxed out at $5,000.
2) A personal loan of $5,500.
*We used the Discover card and personal loan to pay for our wedding, which you can read about here.
3) My student loans of $6,000.
Also, we have 2 Chase Southwest credit cards that we do not carry a balance on but pay off in full each month. All of the loans/cards are in my name, except the 2 Chase cards which also have Andy as an authorized user.
We knew that my student loans wouldn’t qualify for SCRA (and honestly, the interest on them is 3.5% so no big deal!), which left us with 2 Chase cards, 1 Discover card, and a personal loan. I called each of the lenders and asked for them to check if we would qualify for SCRA relief. My personal loan (through a local bank in my hometown) said I did not qualify because Andy was not a co-signer, but it would have saved us only $50 so it was no big deal. That loan is due to be paid off in February 2018 due to the payment schedule. Chase said I didn’t qualify either because Andy is not a liable party on the account, but since we don’t carry a balance on those cards, again, it was no big deal.
My main concern was the Discover card. I had maxed it out in 2014/early 2015, and paid it off on December 31, 2015. (Maxing it out was entirely of my own doing, long before Andy and I became a thing.) When Andy and I got engaged, we charged our wedding expenses on that card and once again maxed it out. I sent Discover a copy of our marriage license, and they approved us for SCRA relief. Discover is quite generous because they went above what the law requires of them. They didn’t require Andy to be listed on the account, lowered the interest from 18% to 5.9%, and also refunded all over-paid interest from the date I opened the card 3 years ago (even though Andy and I married only 4 months ago.) They applied the over-paid interest to my card balance, bringing it down from $5,000 to $3,600!!!
This alone will help us pay off our Discover card 7 months early!!! Our projected Debt Freedom Date was July 2020, but thanks to the SCRA relief, it is now January 2020…. and that’s not even including any “debt snowflakes”! Andy and I are both so thankful and overjoyed to have this little boost towards debt freedom. When Andy and I are finally debt free and are on the Dave Ramsey show doing our Debt Free Scream, I definitely plan to mention this as one of the biggest ways we paid off our debt on a low military income.
I highly urge every single military family to look into the Servicemember’s Civil Relief Act. It doesn’t hurt to ask, and you never know, you may end up saving thousands of dollars on interest!