Military Financial Advice - Army Times

AAFES reminds workers of some troops’ lower interest rate

The Army and Air Force Exchange Service has ramped up training for employees in its exchange credit program call center after questions arose about whether the employees are reducing credit card interest rates as required by the Servicemembers Civil Relief Act.

The training began after Military Times notified AAFES on June 15 about an Army captain’s difficulty in getting his interest rate reduced, AAFES spokesman Judd Anstey said.

Army Reserve Capt. Jon Davis said AAFES repeatedly denied his request to reduce his interest rate to 6 percent on Military Star credit card purchases he made before being called to active duty, as required under the law.

AAFES manages the Military Star credit card program for all the military exchanges.

After learning about AAFES’ actions, Davis said, “That’s good they’re going to do some service training. That’s awesome. That response tells me they know they need to improve.”

Davis said he had trouble persuading AAFES call center employees that the SCRA applies to him even though he is not deployed. That law applies to debt incurred by a service member before joining the military or by a reservist before mobilization. A member’s deployment status is irrelevant.

AAFES officials said confusion among call center employees may stem from a separate exchange service policy under which the Military Star card interest rate is reduced to 6 percent for soldiers and airmen who deploy to contingency areas, with the lower rate remaining in effect for the duration of their deployments.

Unlike the SCRA, which covers only debt incurred before coming on active duty, the AAFES deployment policy covers debt incurred while on active duty, even though the exchange service is not required by law to do that.

“There’s a common misconception that SCRA protections only apply when someone is deployed overseas,” said retired Air Force Reserve Col. John Odom, an attorney and recognized SCRA expert in Shreveport, La. “That’s simply incorrect, but a lot of folks don’t get it.”

Davis began communicating with AAFES in March after realizing he had never been given the reduction he requested when he was activated in September 2005. He had applied for and received the Military Star card in January 2005.

Davis, stationed at Fort Polk, La., said he eventually was able to reach an official who told him June 14 that his interest rate would be lowered and credited on his next statement.

“I’m really disappointed we had this mistake, but am happy it has come to light,” said Jan Adrian, AAFES’ credit program manager.

Davis said he has put out the word to 60 other reservists in his unit about how the SCRA applies to the Military Star card.

DISCUSS: Interest rates