Over the past eight years, the Consumer Financial Protection Bureau's (CFPB) Office of Servicemember Affairs (OSA) has engaged with military families throughout the country and even the world. Each year, it receives tens of thousands of complaints from service members, veterans and their families about financial products and services.
The CFPB has heard lots of barracks rumors and scuttlebutt and now hopes to arm you with the ground truth about the following topics.
Myth #1: Credit card companies are required to waive annual fees for service members.
Truth: Although a number of credit card companies offer to do this as a way to say "thanks for your service," the law doesn't specifically require them to waive annual fees for service members. However, the law does require that credit card companies disclose all credit card fees to ensure that you can make a true "apples-to-apples" comparison. Have or getting a credit card? Check out the CFPB's resource on credit cards to learn more.
Myth #2: The Servicemembers Civil Relief Act (SCRA) only helps by lowering interest rates.
Truth: The SCRA provides many important protections and benefits to active-duty service members beyond just the 6 percent interest rate cap for pre-service loans. For example, the SCRA has special protections concerning foreclosure, repossession, default judgments and more. And for good reason -- troops who are deployed "downrange" shouldn't be worried that anyone is going to take away their house or car. Download the CFPB's SCRA factsheet to learn about what else the SCRA can do for you.
Myth #3: The Military Lending Act (MLA) doesn't protect my spouse or my dependent children.
Truth: While you were at field training, did your spouse or child buy something on credit with outrageous rates? Fear not -- as long as you were on active duty under a call or order for more than 30 days, the MLA covers your spouse, your children (if under 21 or under certain other circumstances), and certain other kinds of dependents. Reservists or members of the National Guard on active duty have the same protections. Remember, while the MLA limits most loans to a 36 percent interest rate and provides other important protections, it does not apply to all loans. Want to know more? Get informed of your rights by downloading the MLA factsheet.
Myth #4: You need to pay someone to help you with your financial issues.
Truth: The old saying that you "get what you pay for" is true in many ways, but it doesn't apply all the time. In personal finance matters, Uncle Sam provides troops and their families with a free Personal Financial Counselor to help out. Any troops who are in true financial stress -- such as in need of essentials like rent, food or other basic items -- can get help, including zero-percent loans from military relief societies. In addition, both service members and veterans can get free or low-cost financial help through non-profit credit counseling services.
Myth #5: Financial issues are too complicated for the average person.
Truth: Managing your financial life may seem like rocket science to some people, but the CFPB has many free tools to help you make sense of it all. Whether you're creating a budget, reducing your debt, or planning for your retirement, you don't have to go it alone. The CFPB's research shows that it's not what you know about financial products and services that matters, it's what you do when faced with a financial decision. This means knowing when to seek more information, knowing where to find trusted information, and knowing how to act on your decision. Get started with the CFPB's money goals worksheet today.
Want to Know More? Muster with OSA!
OSA's mission includes educating troops, veterans and their families about financial challenges throughout their military financial lifecycle. We're an experienced team of ex-military who've "Got-Your-6" when it comes to all things in personal finance. So get yourself squared away by signing up for email updates where you'll automatically get alerts on all of our missions.