Military Lines of Credit: You and Your Money

If you have spent any time in the military or know someone who has, you may be familiar with something called the UCMJ. The acronym UCMJ stands for the Uniform Code of Military Justice. The UCMJ is a body of regulations that augment or otherwise, supersedes the standard letter of the law. Even so, these laws are only related to enlisted personnel and help to ensure they uphold the integrity, honor and respect that the military represents. What does this have to do with money and credit cards? Well, just as there are laws regarding how common individuals are evaluated for credit, there are unique rules and stipulations that apply only to military personnel.

Each credit agency or bank have their own spin on the rules as it applies to individuals that fall under the UCMJ. With this however, there are a number of common rules that apply to enlisted, their pay, and how creditors can help. Here are the 5 most common elements:

  • All will require one or two documents offering your current pay grade, enlistment type and service status. The documentation varies but should contain your personal information along with ETS details. Bringing in your last two pay statements will help, but they organization will need something like the Navy’s Active Enlisted Summary Record or Air Force’s Proof of service letter (VMPF).
  • For loans, most lenders will require repayment come by either electronic funds transfer (EFT) or allotment. EFT is often the simplest and easy to setup while allotment is the preferred method for most lenders. Allotments come straight from your branch financing office so their is less concern of errors or issues using this repayment method. It also means that you will never miss or be late with a payment – this will help improve your credit drastically. Honestly, setting up any installment relationship such as house payments (if you live off base) or vehicle payment this way is always recommended for military personnel to avoid any negative issues that may result in reprimand for not paying your bills accordingly, as outlined in the UCMJ (923a. ART. 123a. http://www.au.af.mil/au/awc/awcgate/ucmj2.htm).
  • With the fact that service members often have unpredictable schedules and unexpected cost, most credit card companies and lenders have a number programs to defer payments. In some cases, it is even possible to have the debt forgiven when necessary.
  • The rates for credit is typically based on personal loan and credit history. However, most credit card lenders will take into consideration the duration of your current enlistment, length of your obligation to your branch of service, and service record when determining the variable interest rate. The average rate is between 8% to 15%. If you request a credit card or loan and the APR is above 15%, you may want to reconsider accepting the terms. Learn more about military personal loans today!
  • The UCMJ is not the only rules that apply. Each loan or credit agreement has stipulations, some related to the city or state of origin, but many of these stipulations are in the service member’s favor as it doesn’t help grow a business when the military doesn’t like how you treat their service men and women. With that said, the stipulations surrounding agreements will often help individuals who provide accurate data, offer easy communications, and help the agency help them.
  • If you have had a unique situation or have additional insight you would like to share feel free to offer your unique view. From a very thankful nation, community, and country full of freedom – thank you for your service!

About Kevin Williams

Kevin works as a independent consultant, helping people improve their financial situations. The author has a BS and Masters along with years of experience with credit cards, techniques for improving individual credit and life.

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