As an active-duty military member, you may have enjoyed fee waiver on credit cards, thanks to protections like the Servicemembers Civil Relief Act (SCRA) and the Military Lending Act (MLA). These benefits can save hundreds of dollars annually on top-tier credit cards with incredible perks, but they don’t last forever.
Upon retiring or separating from the military, your credit card issuers may begin charging standard annual fees, which could significantly impact your finances. If you’ve had the card for many years, canceling may not be the best option either, since doing so could negatively impact your credit score.
Understanding your options before your military status changes is essential to avoid unnecessary costs and maximize your rewards. Here’s everything you need to know about your options for fee-waived credit cards once you leave the military.
Table of Contents
Key Takeaways:
- Know your issuer’s policy: Credit card issuers have different timelines for when they start charging annual fees after you leave the military. So check their policies in advance.
- Evaluate whether to keep, downgrade, or cancel: If a card offers high-value perks that outweigh the annual fee, keeping it could make sense. Otherwise, consider downgrading or canceling it while being mindful of the impact on your credit score.
- Redeem or transfer points: Some issuers may close accounts upon separation, potentially leading to lost rewards, so use or transfer your points before making any changes.
Grace Periods
Upon leaving active duty military service, most credit card companies will provide you with a grace period before imposing previously waived annual fees. The exact grace period will vary by issuer, though it’s typically at least 180 days. It’s important to be aware of each bank’s policy so you can plan your next move accordingly.
- American Express: Once American Express flags an account as no longer eligible, a notice gets sent out at least 45 days before the relief end date, and any annual fees are due.
- Bank of America: SCRA benefits end when the active duty period ends, though there are a few exceptions. Bank of America extends a 12-month grace period on home loans and six months on credit card or installment loans.
- Capital One: Offers SCRA benefits, including annual fees, for up to a year after activity duty ends.
- Chase: SCRA benefits apply for up to one year post-active duty.
- Citi: SCRA benefits end within 180 days of active duty end date.
How Do Credit Card Companies Know You’ve Left Active Service?
Credit card companies typically learn that you’ve separated from active military service through automated data matching with the Department of Defense’s Defense Manpower Data Center (DMDC). Many issuers periodically check this database to verify a cardholder’s active duty status.
Once the system flags that you’re no longer listed as an active servicemember, the bank may adjust your account terms accordingly. Your annual fees and interest rate will increase, though you’ll typically receive a 45-day notice before any changes go into effect.
If you’re transitioning out of the military, it’s a good idea to proactively check with your credit card issuer about how your account terms might change as a result.
Related: Best Military Credit Cards for 2025
Compare the rates, fees, and rewards of top credit cards for military servicemembers and veterans, including cards with waived annual fees under the SCRA, with our Card Finder tool powered by CardRatings.
Deciding Whether to Cancel or Retain the Cards
Since credit card annual fees resume shortly after leaving the service, you’ll need to decide whether to cancel or retain the cards. If you’re considering keeping the card, you’ll want to assess whether the card’s benefits justify the cost. Consider the following factors when deciding whether to keep or cancel your credit card after:
Downgrading Instead of Cancelling
If your credit card’s annual fee becomes a burden after you leave the military and no longer qualify for a fee waiver, consider downgrading it instead of canceling. All the major banks mentioned in this guide offer credits with low or no annual fees. By downgrading your card, you can maintain your credit history and preserve your credit score.
Downgrading typically involves retaining the same account number and credit limit, minimizing potential negative impacts on your credit profile. ?
Impact On Your Credit Score
Before deciding, consider the downsides of canceling your card and whether downgrading might be better. Canceling a credit card can reduce your overall available credit, which can increase your credit utilization ratio—a key factor in your credit score. If the canceled card is one of your oldest accounts, it may shorten your credit history, which also hurts your score.
Downgrading a card to a no-annual-fee version usually has a lesser impact since the account remains open, preserving your credit history and available credit limit. However, some issuers might reduce your credit limit during a downgrade, which could still increase your utilization ratio and negatively affect your score.
The age of your credit card account is another important factor in your credit history, making up 15% of your FICO score. If the card you’re about to cancel is one of your oldest, it could lead to a drop in your credit score.
If this is the case, you’ll be better off downgrading to a no-annual-fee card rather than canceling outright. At least then, you’ll get to maintain your credit history. Additionally, if you have few credit accounts, closing one could make your credit profile less diverse, potentially lowering your score further.
Keeping your credit card account open (in one form or another) helps maintain a long credit history and avoids the potential short-term dip in your credit score that can come with outright cancellation.
Accumulated Rewards
Before making any changes, review and redeem any accumulated rewards, as some issuers may forfeit unused points or miles upon account closure. Transferring rewards to another program or using them before canceling can help preserve their value.
Similarly, it’s worth checking how many rewards you’ve earned via credit card spending in the previous year. If you’ve earned enough rewards to justify the annual fee, then consider keeping the card or opting for a lower annual fee version that rewards the same spending categories.
Recurring Benefits
Lastly, consider if the card’s annual fee aligns with the value you derive from its benefits. Some cards don’t earn many points but offer useful perks that offset the annual fee. These include recurring statement credits, travel protections, elite status, and other perks that can help you save money on travel. You should consider keeping the card if these benefits exceed the annual fee.
For example, I hardly use my Hilton Aspire Card, but I keep it because it gets me top-tier Hilton Honors Diamond status, an annual free night, and $600 in travel statement credits every year. Even though I’m earning no points from it, the card’s $550 annual fee is well worth it for the travel savings.
Related: Are credit card rewards and frequent flyer miles taxable?
What to Do Based On Your Cards
Each major card issuer has different policies regarding military benefits post-active duty. Understanding these policies can help you make informed decisions about whether to keep, downgrade, or cancel your cards once standard fees apply. In this section, we’ll break down what to do based on your credit card issuer:
American Express
American Express waives annual fees for active-duty military members under the SCRA and MLA. Once American Express receives notice of ineligibility, it will notify customers at least 45 days before the benefits are discontinued. During this period, you can decide whether to keep your Amex card and pay the annual fee or cancel or downgrade to avoid it.
If you keep the card, it’s worth calling American Express to negotiate a lower annual fee. Amex has been known to offer partial waivers or bonus points to cardmembers who they deem valuable. Many non-military folks have had success in getting partial fee waivers, so it’s worth trying.
However, if you don’t use your Amex card enough to justify the annual fee, you can downgrade to one with a lower or no annual fee. Amex has great customer service via the online chat function, so you don’t need to call to make a request.
If you do decide to cancel or downgrade from a rewards card to a cash back, you may lose your points. So be sure to redeem them beforehand. ?
Amex Cards Eligible for SCRA or MLA Benefits
- The Platinum Card® from American Express
- American Express Platinum Card® for Schwab
- American Express® Gold Card
- American Express® Green Card
- Marriott Bonvoy Brilliant™ American Express® Card
- Marriott Bonvoy Bevy™ American Express® Card
- Delta SkyMiles® Reserve American Express Card
- Delta SkyMiles® Platinum American Express Card
- Delta SkyMiles® Gold American Express Card
- Blue Cash Preferred® Card from American Express
- Hilton Honors American Express Aspire Card
- Hilton Honors American Express Surpass® Card
Related: Amex vs. Chase Trifecta: Which is Best for Military Members?
Bank of America
Bank of America extends most SCRA benefits until active duty ends, with a six-month grace period on credit card and installment loans. During this period, you may continue to receive reduced interest fees and a deferment on your annual fee.
Beyond this period, you have plenty of options if you decide to downgrade your card. Bank of America has an extensive lineup of rewards credit cards, many without annual fees. Downgrading can make sense if you’re willing to take a slightly lower reward rate.
Unlike Amex and Chase, Bank of America doesn’t have a stellar transferable rewards program. Points are worth one cent each on most cards, making these rewards akin to cash back. So, if you’re not getting much value out of a card’s perks, you might want to downgrade to avoid a recurring annual fee.
Bank of America Cards Eligible for SCRA or MLA Benefits
- Bank of America® Premium Rewards® Elite Credit Card
Capital One
Capital One goes slightly above most other banks when it comes to SCRA benefits. The bank caps credit card and loan interest at 4% rather than the standard 6%. This lowered rate and waived credit card annual fees apply up to a year after you leave the service.
Capital One isn’t too heavy-handed with annual fees. For example, The Venture X Rewards Credit Card has a $395 annual fee – nearly half of what competitors like Amex and Chase charge for premium credit cards. If you decide the $300 annual Capital One Travel credit isn’t enough to offset the fee, you can downgrade to a Capital One Venture Card with a $95 annual fee or a VentureOne Rewards card with no annual fee.
Capital One Cards Eligible for SCRA or MLA Benefits
- Capital One Venture X Rewards Credit Card
- Capital One Venture Rewards Credit Card
- Capital One QuicksilverOne Cash Rewards Credit Card
Chase
Chase waives annual fees for active-duty servicemembers and extends this benefit for one year after leaving active duty. After this period, standard fees apply, though you can always request a waiver. If that doesn’t work, downgrade to a card with a lower (or no) annual fee to minimize the impact on your credit score.
For example, if the Chase Sapphire Reserve®’s $550 annual fee is too high, you can downgrade to a Chase Sapphire Preferred® Card with a $95 annual fee. If the Sapphire Preferred’s fee is not within your budget, consider downgrading to a no-annual-fee Sapphire Card (which isn’t advertised but is available for product changes) or even a Chase Freedom Unlimited®.
Chase Cards Eligible for SCRA or MLA Benefits
- Chase Sapphire Preferred®
- Chase Sapphire Reserve®
- Southwest Rapid Rewards® Plus Credit Card
- Southwest Rapid Rewards® Priority Credit Card
- Southwest Rapid Rewards® Premier Credit Card
- United Explorer Card
- United Quest Card
- United Club Infinite Card
- Aeroplan Card
- Marriott Bonvoy Boundless
- Marriott Bonvoy Bountiful
- Ritz-Carlton Credit Card
- IHG One Rewards Premier Credit Card
- Disney Premier Visa Card
- World of Hyatt Credit Card
- British Airways Visa Signature® card
- Aer Lingus Visa Signature® card
- Iberia Visa Signature® card
Citi
Citi offers fee waivers for active-duty military personnel. These waivers may not continue post-service, so it’s important to contact Citi to understand when standard fees will resume and plan accordingly.? Most of Citi’s credit cards don’t have an annual fee to begin with. But if you have a Citi Strata Premier? Card at the end of your service that you don’t want to pay the $495 annual fee for, then you can downgrade to a Citi® Double Cash Card, which has no annual fee.
Before downgrading your card, remember to transfer your points to one of Citi’s 19 transfer partners. Otherwise, your rewards get converted to cash back and will be transferable to just two programs.
Citi Cards Eligible for SCRA or MLA Benefits
- Citi® / AAdvantage® Platinum Select® World Elite Mastercard®
- Citi® / AAdvantage® Executive World Elite Mastercard®
- Citi Strata Premier? Card
- Citi® Prestige® Card (no longer accepting new cardmembers)
Related: Citi Credit Card Benefits for Military
How to Close a Credit Card Account
If you decide to close a credit card account, follow these steps to minimize potential negative impacts on your credit score:
- Pay off your balance: Ensure the card balance is paid in full to prevent interest charges or penalties.?
- Redeem unused rewards: Use any accumulated rewards before closing the account to avoid forfeiture.?
- Update recurring payments: If you have recurring payments linked to the card, update them with a different payment method to avoid missed payments.
- Contact Issuer: Contact the card issuer’s customer service via phone or secure messaging to request an account closure. Confirm that the balance is zero and no further charges are pending.? Sometimes you’ll get offered a partial credit towards the annual fee or bonus points in exchange for keeping the account open. Be prepared for this by determining what number might sway you. Negotiate if you do want to keep the account open.
- Obtain confirmation: Request written confirmation of the account closure for your records.?
- Monitor credit reports: Check your credit reports to ensure the account is reported as closed and that no unauthorized charges occur afterward.?
The Bottom Line
Losing military fee waivers doesn’t mean you have to accept high annual fees or give up valuable credit card perks. With careful planning, you can maximize your benefits while minimizing costs. Before your fee waivers expire, review your cards to determine which ones provide enough value to keep, which can be downgraded, and which should be canceled. Always redeem your points before making changes; some downgrades can result in forfeited rewards.
Lastly, don’t be afraid to negotiate—many issuers offer retention offers or partial waivers to keep valuable customers. By taking a proactive approach, you can transition smoothly while maintaining good credit and maximizing your rewards.
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