Changes Coming to Military Star Credit Card

Military Star Card (Photo:

A series of changes to the Exchange services' Military Star MasterCard program will force users to cash out remaining reward points as Exchange gift cards and carry two separate cards if they want to continue using the MasterCard, officials announced to users by mail in a letter dated July 22.

"We are writing to inform you that the relationship between the Exchange and Chase Bank ... will end on September 30, 2015," the letter says.

Currently the Exchange Credit Program (ECP), managed for all of the Exchanges by the Army and Air Force Exchange Service (AAFES), has two separate credit card programs. The Military Star Card offers a line of credit good only at Exchange operated storefronts on base, including gas stations.

Users receive 10 percent off most purchases the first 24 hours they have the card, five cents off gas at exchange-operated gas stations pay no overage or late payment fees. Unpaid balances on the ECP Military Star Card, however, may be automatically collected from a service members' paycheck or income tax return.

Users could in the past opt to apply instead for a cobranded Chase Bank managed Military Star Rewards MasterCard, which accrues reward points and can be used at almost any store on and off base. It also has no annual fee. Points can be redeemed for cash back or a variety of gift cards to off base stores and restaurants, airline tickets or gift cards for the Exchange systems. ECP is no longer accepting applications for the MasterCard Military Star card program.

Although the co-branded card appeared to be a single line of credit, opting for the MasterCard-branded option effectively created two lines of credit, displayed as separate accounts on users' credit reports. Users also must manage and pay the cards through two separate accounts on two separate websites. Neither credit line currently comes with an annual fee. Only those with the MasterCard option can currently earn reward points for purchases.

About two million military members and their spouses use the Military Star card, while about 98,000 of those also use the MasterCard option.

Both cards carry an annual percentage rate of 10.24 percent. The Exchange services save an estimated $20 million in credit card processing fees each year through use of the card at their stores since they don't pay fees on their own card program, officials said.

Exchange officials said the split is being made so they can expand the rewards program to all customers, not just those who use the MasterCard. Doing so, however, will force all users to automatically receive Exchange gift cards as rewards payout every time they reach 2,000 points, instead of banking them over time for other options currently included with the MasterCard.

"Through our focus groups and when looking at customer point balances, we saw many customers were not taking any action with their points and, in some cases, weren't even aware of their point balances.," said Chris Ward, an AAFES spokesman. "By automatically issuing rewards cards, we're making it convenient for customers."

Users who currently have rewards with their MasterCard must redeem them by September 22, according to the letter. If they do not their points will be automatically zeroed out and they will be mailed Exchange gift cards.

Splitting the two lines of credit into two physically separate cards will also likely mean a new set of terms, and possibly fees, for the MasterCard users. Although users currently receive 2 percent cash back on Exchange purchases and 1 percent cash back on all other purchases, the structure could change.

Officials with Chase said members can continue to use their Military Star Rewards MasterCard through September 30. They said changes to that program will be announced in August.

-- Amy Bushatz can be reached at

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