*Post updated on 01 FEB 18 to include the new AMEX Platinum Sign-up Bonus and new Hilton Aspire Signup Bonus

Disclaimer: This post contains referral links to products that I personally use. If you sign up for any of these products using the embedded links, I will receive a referral payment. If this is something that makes you feel uncomfortable then simply don’t click the link and google the product instead. I really don’t care about the referrals. This is not some “Ponzi scheme”. I will never recommend a product or strategy that I do not personally use or believe will benefit a service member in the best place possible… their wallet.

Bottom Line Up Front:

American Express waives all annual fees for active duty military, allowing service members to tap into prestigious Credit Card Rewards Programs they would not otherwise have access to. Rewards cards typically are divided into four categories: Points, Cash-back, Miles, and Hotels.

In this article, I will reveal the best card in each category for active duty service members, and how best to employ them to maximize rewards.

 

Credit cards… they can be your best friend or your worst enemy. Unfortunately, credit cards are typically seen in a negative light, and for an understandable reason. Individuals who lack financial discipline often use credit cards to live beyond their means and soon find themselves drowning in credit card debt; paying hundreds or thousands of dollars in interest over time while barely making the minimum payments each month.

Conversely, credit cards are immensely powerful tools in the hands of those that have the discipline to pay off the balance every month. The reason why is three words: CREDIT CARD REWARDS. They make their credit cards work for them instead of against them by essentially getting paid to spend money they would spend already and save/earn hundreds or thousands of dollars over time.

There are dozens of credit card rewards programs out there; ranging from measly to lucrative. The absolute best rewards cards typically come with a hefty annual fee in order to offset the substantial rewards. However, American Express waives these fees for active duty service members, thereby unlocking amazing rewards and incentives for free. I will say that word again… free; no catches, no tricks, no hidden fees… free.

However, before we even talk about which rewards card to get, you are going to take Military Credit Card Rewards 101, where I talk best practices and dispel some myths. Click here if you just want to get to the good stuff.

Military Credit Card Rewards 101

 

1) Know your Credit Score

As I mentioned in a previous post; your credit score effects multiple aspects of adulting. A solid credit score is absolutely vital to leasing apartments,  purchasing vehicles, or buying a house without paying thousands of dollars in extra interest. There are many ways to raise and lower your credit score. The absolute fastest way to build a good credit score is to get a credit card and pay off the balance on time, every month. Credit scores range from 350 to 850; the higher the better. To qualify for any of the cards I mention below, you will likely need a score above 700.

The FICO website determines your score via five main factors: 35% payment history, 30% amounts owed, 15% length of credit history, 10% new credit and 10% types of credit. Everyone is entitled to a free credit report each year from each of the three major credit reporting agencies at annualcreditreport.com. USAA members can also find their credit score in their user profiles. You can find out more about your credit score here: Understanding How Your Credit Score Works

Credit Score components, according to myfico.com

2) Do not miss a payment

The fastest way to crush your credit score is to miss payments. As you can see in the graphic above, your payment history makes up over one-third of your overall credit score. In addition to ruining your credit score, missing payments can be very costly. For starters, most credit card issuers charge a late fee of $25-$35 and a late payment will stay on your credit history for years. To avoid this, set your billing on automatic payments.

3) Pay your balance in full

Credit cards are not free money. Just because your card has a $20,000 limit, does not mean you spend $20,000 without a plan to quickly pay it off. Rewards credit cards typically carry high-interest rates, so the interest you incur by not paying off your balance will absolutely negate the value of any points or miles you earn.

Additionally, carrying a balance of more than 30% of your available credit (ex. $10K if you have $30K in credit), will drastically decrease your credit score. If you have two cards each with a 10K limit, and one card with a 5K limit, you have 25K available credit. Credit card companies want you to carry a balance so that they can make money off your interest; don’t give them free money.

Unfortunately, a vast majority of credit card users regularly carry a balance on at least one of their accounts, leading to costly interest charges. If you are one of these people, you should forget about earning travel rewards and instead focus on paying that debt off as soon as possible.

Furthermore, if you are tempted to use a new line of credit to make unnecessary purchases, or historically have trouble controlling spending, then I once again urge you to focus paying down other debt and controlling those habits first.

Always spend within your means.

4) Charge cards vs Credit Cards

There is a massive difference between these two types of cards, and it is imperative to understand the difference.

Credit card
A credit card lets you make purchases for which you are billed later. Most credit card accounts allow you to carry a balance from one month to the next. However, you will usually have to pay interest on that balance. You also have to pay a certain amount of your balance each time you receive a bill. Credit cards have a preset spending limit based on your credit history.

Charge card
Charge cards do not allow cardholders to carry balances from one month to the next. Instead, you must pay off the entire balance each month. Charge cards do not come with preset spending limits. In theory, you could buy a new car with your charge card… as long as you can pay it off at the end of the month. Charge cards are a good forcing function for people who are tempted to carry a balance by eliminating this option entirely.

5) Use your Rewards Card like a Debit Card

Almost all rewards cards come with a substantial introductory offer to entice you to apply for and use the card; usually something along the lines of “spend $3,000 in the first three months and get 50,000 Rewards Points/Miles.” You absolutely want to earn these introductory bonuses as they are huge incentives in addition to maximizing the rewards/miles/cash-back you receive on a regular basis. You do this by using your Rewards Card in place of your debit card for all your regular spending.

The point is not to go out and spend money frivolously on things you don’t need, but to earn points/miles/cash on money you spend anyway. I use my Rewards Card for almost all my bills to include cell phone, internet, Netflix, Amazon Prime, etc. Hell…I would pay my mortgage and car payments with it if I could! I then pay off all my rewards cards’ bills every two weeks in order to easily keep a lid on things.

6) MYTH: Applying for a credit card will greatly lower your credit score

FACT: Only marginally and temporarily! Applying for a credit card or any other type of loan will result in a “hard inquiry”. A hard inquiry will lower your score maybe 2-to-5 points for a short period of time. Not only does this small amount not matter, but your credit score will actually end up raising due to the increase of your available credit upon the approval of your new card.

A “soft inquiry” is an inquiry that occurs when a person or company checks your credit report as a background check or when you check your credit score. It won’t affect your credit score in any way. Learn more about the difference between hard and soft inquiries at this link.

7) MYTH: Canceling cards helps your Credit Score

FACT: NOPE! Canceling a credit card will actually HURT YOUR SCORE! In the graphic above, you can see that “Length of Credit History” comprises 15% of your credit score. The longer you have a credit account open, the better your credit score will be.

• A large part of your credit score (30%) consists of your credit utilization ratio: how much of your available credit you actually use. If you currently have a balance of $5,000, and have $40,000 of available credit, your credit utilization rate is just 12%. If you then cancel a card with a $20,000 limit, your rate suddenly jumps to 25% (because your available credit is now just $20,000).
• Another part of your credit score (15%) consists of your length of credit history, and part of this equation is the average age of your accounts. If you’ve had a card for 5+ years, do not cancel it! Make a few purchases on it each year (so the bank doesn’t close it) and let it continue to add to your history.

When I was 18, my dad made me get a North Carolina State Employees Credit Union Card with a $3,000 limit in order to help build my credit score early on. The card is still active, even though I haven’t used it in about 8 years, and my credit report lists my longest credit history as 14 years. Thanks Dad!

 

Best Military Credit Cards

Congratulations! You’ve passed Credit Card Rewards 101 and are now ready for the good stuff! I will now describe the best card in each Rewards category and the best practices to employ them to maximize your rewards.

Best “Points” Card

The absolute best travel rewards points card for active duty military is the Platinum Card® from American Express. It is the premium travel card for fancy smancy business men who can afford the normal $550 annual fee. Additionally, these same individuals are required to pay an additional $175 annual fee for each additional cardholder. However, as I said before, American Express waives all fees for active duty service members AND their spouses! They do this in support of the Service Member Civil Relief Act (SCRA). These “Points” can be used for almost anything: hotels, flights, rental cars, amazon, air bnb, online shopping, pay your balance, etc.

Here is a list of some of the best reasons to get this card:

• They currently offer an introductory 75,000 Rewards Points bonus after spending $5,000 in three months.  This bonus is worth approximately $1150!
• 5x points per dollar spent on flights booked directly with airlines as well as hotels booked through American Express. 1x point per dollar spent on everything else.
  • These points can be used dozens of other ways besides flights and hotels such as AirBnB, Amazon orders, or even to pay your bill.
    
• $200 each year in Uber credits and Uber VIP status. 
• $200 annual refund for airline fees. 
  • You can spend this on things like checked baggage, Wi-Fi, and in-flight meals. Or you can do what I do and get a free $200 gift card from the Delta Airlines website to use on a flight.
    
• $100 credit for TSA Pre-check or Global Entry.
  • As military, you get free TSA Pre-check anyways by using your DOD ID # from your CAC card when booking flights, but you can use this credit for your Dependents.
• Free access to almost all Domestic and International Airport Lounges for you and two other people. This includes all Delta Skyclubs as well as the exclusive Centurion Lounges.
  • This is a massive benefit for any person that flies at all. Many of these lounges have gourmet food buffets, free Wi-Fi, free top-shelf alcohol, super comfy chairs, and even showers. Check out this one in Miami.

• Automatic enrollment in Hilton, Starwood, and Marriott Elite Gold status.
  • This is another massive benefit. You will earn 25% more Hotel Rewards Points than a base Loyalty member in addition to the 5x points Amex Rewards points that you earn by booking the hotel directly through Amex!
  • Gold status gets you early check-in, late check-out, complimentary room upgrades, AND free breakfast. Additionally, for Gold Members, Hilton offers a free 5th night for every four stayed.

• Automatic enrollment in Hertz, Avis, and National Rental car preferred membership programs.
• Car rental loss and damage protection. Never pay that insanely high rental car insurance again.
• The ability to convert Rewards points into any of the major frequent flyer “Miles” programs.
• Free Boingo Wi-Fi access. Many airports across the nation use “Boingo” as their provider (stupid name though).
• No foreign transaction fees.
  • Many credit cards charge you a fee (generally 2.7 – 3%) for every purchase you make in a foreign country in order to convert the purchase into dollars. Amex does not.
• The Amex Platinum is a charge card, not a credit card so purchases must be paid in full every single month.

Vignette

During my last deployment, we decided we wanted to take our family to Disney World during our post-deployment block leave. As anyone with kids knows, Disney World is very expensive; especially the lodging. Several of my Army friends had been raving about the Amex Platinum for years, but I had always ignored them for some stupid reason. However, I finally decided to take the plunge in order to potentially defray some of the costs of our vacation with Rewards Points.

We hit the sign-up bonus of 60,000 points in the first three months and racked up another 20,000ish points over the rest of the deployment; all through regular, every day spending. I then discovered that I could use my Amex rewards points through Airbnb, and booked four nights in a two-bedroom condo at the Wyndam Bonnet Creek Resort at 20,000 points a night.

We had literally just earned four nights of free lodging at a kickass resort on the Disney property by simply spending money we would normally spend anyways. Oh and it came with a kitchen and the kids had their own room ;-)! Needless to say… I was a believer. I now use this card for everything except gas and groceries, and I haven’t paid out of pocket for a flight or hotel in two years.

 

How to Apply and get your Benefits

You can apply for the American Express Platinum by clicking this link. The process takes about 2 minutes.

After applying for the card, you can apply for your service member benefits by clicking this link. They will run a background check to confirm your active duty military service. Once again, this is for active duty only, it unfortunately does not apply to National Guard or retirees.

Back to Top

Best “Cash-back” Card

The best cash-back card for active-duty military is the Blue Cash Preferred® Card from American Express. Most cashback cards give between 1% – 2% cash back on all purchases, which is OK. However, the Amex Blue Card gives a whopping 6% cash back on groceries, 3% cash back at qualifying department stores, 3% cash back on gas, in addition to 1% cash back on everything else!

Typically there is a $95 annual fee for this card; however, once again American Express waives this fee for active duty service members. This card is a credit card, not a charge card so you have the ability to carry a balance from month-to-month… don’t.

List of reasons to get this card:

• Current introductory offer: Spend $1000 in three months and get $200 cashback.
• 6% cash back on groceries (Commissary, Publix, Kroger, Freshmarket, etc)
  • This does NOT include Walmart, Sam’s Club, or Costco
  • Pro-tip: You can buy gift cards at grocery stores to other places (Like Best Buy, Home Depot, Olive Garden, whatever) and get 6% cash-back on your gift card purchase.
• 3% cash back on qualifying department stores
  • You can find a list of qualifying stores at this link.
• 3% cash back on gas (this includes on-post gas stations).
• 1% cash back on everything else.
• They give you a neat visual breakdown of your categorized spending.

Vignette

As I mentioned above, I use my Amex Platinum for everything but Gas and Groceries. If you are like me, you probably drive a truck or a jeep and get like 9 miles to the gallon with a tailwind. If you are also like me and have monsters (I mean kids), you probably spend a ridiculous amount on groceries every month. 6% cash back is worth way more than one Rewards Point. Last year alone, I got about $700 cashback between the introductory offer and normal spending in those two categories.

I also like how it automatically breaks down and categorizes your spending, so you can see exactly how much you spend on certain things, and then cry when you see your annual grocery bill. It makes it very easy to start and maintain a budget.

How to Apply and get your Benefits

You can apply for the American Express Blue Cash Preferred by clicking this link. The process takes about 2 minutes.

After applying for the card, you can apply for your service member benefits by clicking this link. They will run a background check to confirm your active duty military service. Once again, this is for active-duty only, it unfortunately does not apply to National Guard or retirees.

Back to Top

Best “Miles” Card

The best “Miles” card for active-duty military is the Delta Reserve Card® from American Express. This card rewards your spending with “Miles” instead of “Points” or “Cash-back.” You can then use these Miles to purchase flights with Delta Airlines. Delta is the official partner of American Express. If you aren’t a Delta guy, there are plenty other Miles cards out there for other airlines, however they likely don’t waive the annual fee like American Express.

Speaking of fees, this card has a $450 annual fee, but you are a bad-ass American freedom fighter, so you and your spouse don’t have to pay it. Also, this a credit card, not a charge card. Once again, don’t carry a balance; consider the dead horse beaten.

Lists of reasons to get this card:

• Current introductory offer: Spend $4000 in three months and get 75,000 bonus Miles.
  • For reference, here is a general breakdown of how many Miles it typically takes to get a free flight:
    • Domestic: around 12,500 – 20,000 points
    • Hawaii: 15,000 – 22,500 points
    • Mexico/Central America/Caribbean: 12,500 – 17,500 points
    • Europe: 25,000 – 30,000 points
    • Asia: 35,000 – 40,000 points
    • South America: 20,000 – 30,000 points
• Earn 2x Miles per dollar spent on Delta purchases, 1x Mile per dollar on everything else
• Receive a Domestic First Class, Delta Comfort+^, or Main Cabin round-trip companion certificate each year upon renewal of your Card. Translation: Free First Class flight for your spouse or best buddy once a year.
  • This is a huge benefit, and is the main reason I have this card. I’ll explain below.
  • Read this article here and here to learn more about this awesome benefit.
• Free access to Delta Skyclubs (you get this anyway with Amex Platinum)
• First checked bag is free
• Priority boarding

Vignette

I got this card for two main reasons, the introductory offer and the free companion flight. All the other perks are already covered by the Amex Platinum. Additionally, it doesn’t really make sense to use the Delta Reserve to earn Miles if you have the Amex Platinum because oddly enough, you can get 5x points on travel booked directly with the Amex Platinum and then convert those Points into Miles. HOWEVER, I knew I wanted to fly my family of four to Texas this summer, and this card helped me accomplish that for free. Here’s how:

Once I got this card, I stopped using my Amex Platinum and Blue Card, and started using the Delta Reserve for all my regular spending. Once I reached the introductory offer, I paid off the card and haven’t used it since. In the process, I earned 75,000 bonus Miles plus a free companion pass and thus completely covered the cost of four tickets to Texas. What’s more, I will continue to earn a free 1st Class companion flight every year just by keeping the card open, and it’s all completely free because I don’t have to pay the annual fee.

How to Apply and get your Benefits

You can apply for the American Express Delta Reserve Card by clicking this link.

After applying for the card, you can apply for your service member benefits by clicking this link. They will run a background check to confirm your active duty military service. Once again, this is for active-duty only, unfortunately it does not apply to National Guard or retirees.

Back to Top

Best “Hotel Rewards” Card

The best “Hotel Rewards” card for active-duty military is without a doubt the Hilton Aspire Card® from American Express. This card rewards your spending with “Hotel Rewards” instead of “Miles”, general “Points”, or “Cash-back.” The biggest difference between the Aspire Card and the Platinum Card is the Hilton Aspire Card earns Rewards Points that are specifically used for free stays at Hilton properties. These properties include Hampton Inn, Hilton Garden Inn, Doubletree by Hilton, Homewood Suites, Home2Suites, Embassy Suites, Curio by Hilton, Conrad, and Waldorf Astoria.

Hilton is the official partner of American Express. If you aren’t a Hilton guy, then I suggest you become one, because while there are plenty other “Hotel Rewards “cards out there for other hotel chains, they likely don’t waive the annual fee like American Express or have as many benefits as this card.

Speaking of fees, this card has a $450 annual fee, but as always, this fee is waived for Active Duty Military. Again, this a credit card, not a charge card, so don’t carry a balance.

 

Here is a list of some of the best reasons to get this card:

• 150,000 Rewards Points bonus after spending $4,000 in three months.  For perspective, that is worth 7x free nights at a Hilton Garden Inn in Atlanta! And by the way, every 5th night is free on rewards stays.

• Hilton Honors Diamond Status — This is an amazing incentive and the main reason I have this card. The Points Guy values Diamond status at over $2,000 annually due to bonus points, lounge access, free breakfast, every 5th night free, and automatic room upgrades.
  • Diamond members receive a 100% points bonus on nights stayed at Hilton Resorts. Plainly, if you were to earn 2,000 points for a 1 Night stay, it would be doubled to 4,000 points!

• Awesome Points Multiplier
  • 14x points per dollar spent on or at Hilton property, 7x points per dollar on flights booked through amextravel.com, and 3x points per dollar on everything else.
• Two Weekend Reward Nights — Automatically receive one weekend night at almost any Hilton property worldwide annually. You’ll receive a second weekend night if you manage to spend $60,000 on the card in a calendar year.
• $250 Hilton Resort Statement Credit — Each year you will receive $250 in statement credits for incidentals charged to your card at participating Hilton resorts. This money can be used on dining, parking, activities and spa treatments… no big deal.
• $250 Annual Airline Fee Credit — Exactly like with the Amex Platinum card airline fee credits, except its $50 more! Once again, this credit can be used to purchase airline gift cards to be used towards flights.
• $100 Hilton On-Property Credit — When you book at least a two-night paid stay at a Hilton property through HiltonHonors.com/aspirecard  you’ll receive another $100 credit for incidentals at properties.
• Priority Pass Membership — Unlimited Priority Pass lounge access for you and two guests.

Vignette

As with the Delta Reserve Card®, I got the Hilton Aspire Card® for two main reasons, the introductory offer, and the automatic Diamond status. In addition to the other incentives, you can also convert Amex Rewards Points into Hilton Points at a 1-to-2 ratio (10,000 Amex points converts into 20,000 Hilton points). Regardless of whether I continue to use the Hilton card after meeting the introductory bonus offer, the Diamond status makes this card extremely worthwhile.

Recently, my wife and kids drove to visit family. To make it easy on them, I used points to book them a stay at a DoubleTree Hilton to break up the trip. I reserved a standard two queen room at 33,000 points (about $145) and because of my Diamond status they were upgraded to a two-bedroom suite worth 57,000 points (about $175) and the whole family got free breakfast (would have been $45. Not only did this save me $75 but it sure helped my wife’s sanity.

How to Apply and get your Benefits

You can apply for the American Express Hilton Aspire Card by clicking this link.

After applying for the card, you can apply for your service member benefits by clicking this link. They will run a background check to confirm your active duty military service. Once again, this is for active duty only, it unfortunately does not apply to National Guard or retirees.

Back to Top

That’s it

See? Credit cards aren’t that scary! I hope I effectively portrayed how financially powerful certain credit cards can be when wielded correctly and with discipline. Don’t do what I did, and ignore these amazing benefits you have as a service member simply because you don’t understand it fully. I cringe at all the free points, miles, and cash-back that I missed out on over the years.

If you wish to learn more about the Credit Rewards game then I HIGHLY encourage you to visit The Points Guy. We haven’t even scratched the surface of the depth of knowledge that he has on this stuff.

In closing, even though military service members can obtain these cards without paying an annual fee, doesn’t mean they necessarily should. Remember, you’ll still have to pay back whatever charges you make. If you use a credit card to overspend and incur debt, then it’s simply not worth having.

However, if you can responsibly utilize these extremely valuable credit card benefits, without paying any fees for these privileges, then you might as well get paid to spend money you would spend anyways. If you found this information helpful, please share it on your social media outlet of choice, and subscribe to my email list to receive more articles like this delivered straight to your inbox.

You’re Welcome