Should members of the military seek out credit cards with special military benefits?
As with any purchase, it makes sense to comparison shop for the best value. Companies routinely provide military discounts or a "freebie" for the customers serving our country. In the case of credit cards, since the cost of borrowing money on the card is the interest rate charged for borrowing that money, it makes sense to drive down that effective rate. This rate reduction can occur through various means, some obvious (e.g., a lower rate) and some not so obvious (e.g., enhanced rewards or a longer payment cycle). On a related note, it is important for servicemembers to understand the benefits provided through the Servicemembers Civil Relief Act (SCRA). This law provides some benefits for those who incurred credit card debt prior to joining the military.
Do credit unions always offer the best military credit card benefits?
Always and never are words used sparingly, particularly in personal finance, where individuals face unique circumstances. There are many pros and cons of credit union cards in general, so it's best to understand the specific terms involved with the credit cards they offer. Larger banks have an advantage of scale, but this scale can sometimes come with increased overhead or features that in turn cost the consumer -- military or civilian -- more than a credit union alternative.
Which group do you think gets the most preferential treatment from credit card companies: college students or members of the military?
I have observed that credit card companies treat college students who are military (i.e., military service academy cadets) quite well. For instance, some companies will waive annual fees and allow these military students access to their more selective credit card products. Obviously, these students have guaranteed future employment and represent low default risk, so they are appealing long-term customers for credit card companies.
Does the military do enough to teach members about credit cards, and personal finance more broadly?
The military is improving its efforts in these areas, implementing programs such as certified financial advisers on bases and programs to provide financial education to servicemembers. However, there is certainly room for improvement. FINRA recently surveyed military members, and the results confirm there is a continued need for increased financial fluency among this group. From financial literacy to retirement planning to credit use behaviors, our military reflects the broader society. That is, servicemembers could enhance financial literacy, engage in more planning for the future, and use debt more judiciously, particularly in the case of the newest entrants.