debt

Should Shoppers Use Their Military Star Card at the Commissary?

07/05/2017 By Veronica Jorden

As part of the Defense Commissary Agency‘s continuing efforts to increase value and convenience at military commissaries across the world, military shoppers at more than 200 commissaries will have the option to use their Military Star card to pay for groceries starting in October. The additional credit card payment method is being incorporated into the point-of-sale payment overhaul already scheduled for the fall.

There are many reasons to be excited about this new option and a few concerns you may want to consider before using your Military Star card at the commissary.

The Benefits of Using Your Military Star Card at the Commissary

Many shoppers are already using credit cards to pay for groceries. Using the Military Star card has some distinct advantages:

Low Interest Rate

In addition to the low interest rate and fair credit lines offered even to those with little or bad credit , the Star card offers no late or over limit fees and the interest rate is reduced and payments waived during deployments. For junior service members and their spouses, the Military Star card can be a great way to build good credit.

Reap the Rewards

In addition to the Commissary Rewards program, shoppers using their Star card can earn extra rewards. Just like many other retail rewards cards, Military Star card users earn 10% back on all of their purchases. These rewards come in the form of a certificate or payment cards that are eligible for redemption at exchanges, shoppettes and on-post food vendors.

Our fingers are crossed that the rewards will also be eligible for use at the commissary. Every reward earned offers shoppers the potential to save some of their hard-earned cash.

Using the Star Card Supports MWR Programs

A considerable amount of the monies earned through interest on Military Star cards is used to fund MWR events and programs. Using your Star card helps keep our military dollars within our community.

Provides Options to Military Families

In her article, Star Card At The Commissary: Good or Bad? , Kate Horrell mentions one important benefit of this payment option:

“Service members who have run out of money will be able to purchase affordable, real food on credit instead of buying expensive junk food at the exchanges or minimarts/shoppettes.”

We know an unhealthy diet is usually a cheap diet, so having the Star card as an option for those months where a paycheck runs a little thin could be a value for some military families.

DeCA Gets to Save

Adding the Military Star card to the list of credit cards currently accepted at commissaries offers a direct benefit to DeCA. For every credit card purchase processed, DeCA must pay a small transaction fee to the credit card processor. Military Star card transactions, in comparison, cost less than say the fees paid to Visa or Mastercard.

The Concerns Associated with Using Your Military Star Card at the Commissary

So we’ve covered the benefits, but what should service members and their families think about before swiping their Star card? Two words – debt management.

Using the card to earn rewards can be a great way to stretch your budget, but that only works to your advantage if you pay off your credit card balance each month.

Credit for Consumables

Many financial advisors warn against using credit to purchase consumable goods. While it is easy and convenient to charge that $200 grocery bill to a credit card, if you only pay the minimum payment, by the time you pay off the balance, you’ll have paid an additional $15 or more in interest. And if you make a habit of it for every weekly grocery run, your annual grocery shopping bill could be more than $700 over what it would have been if you’d just paid cash.

Option for Garnishment

Plus, if you use your Star Card and don’t make a payment, you may soon find your military wages garnished to pay the bill. Regular credit cards don’t have that option.

If you are going to use your Military Star card at the commissary, reap the benefits, but take care to treat it just like any other credit card purchase and shop responsibly.

Do you have a Military Star card? Will you use it at the commissary this fall?

What Veterans Need to Know About Predatory Debt Collection

07/31/2015 By Michelle Volkmann

It’s not a secret that military families tend to be mobile. We move more often than the general population (I cringe every time I’m asked to list my mailing addresses from the past 10 years). We may buy a car in Georgia, a house in Virginia and work in California.

This mobile lifestyle combined with a steady paycheck is why military service members, their spouses and veterans are frequent targets of predatory debt collection.

What Veterans Need to Know About Predatory Debt Collection

Service members need to know that predatory debt collection is against the law.

When I use the term, predatory debt collection, I’m not talking about legitimate student loans that you refuse to pay each month. When I use the term, predatory debt collection, I am referring to cases where the service member already paid the loan or never took a loan out in the first place.

For example, let’s say the service member went to a payday loan or payday advance for a short-term unsecured loan. This soldier, Marine or sailor needed fast cash and they needed it that day. So they decided to use this service. Then, according to the loan’s agreement, they repaid the loan and its interest.

Then 6 months later, this service member gets a phone call in the middle of the night saying he still owes money on the loan. The bill collector doesn’t provide any information about the source of the debt, how old it was and whether it was paid or not. By this time, the service member may be stationed in a different state or serving on a deployment. In that case, the spouse is contacted and left wondering “do we owe money on that loan?” The debt collector threats to contact the service member’s commanding officer. The debt collector mentions that the unpaid debt will result in the loss of a security clearance. This scenario is the type of situation discussed during Senate hearings on predatory debt collection.

This is abusive, aggressive or predatory debt collection. And predatory debt collection is against the law.

The Fair Debt Collection Practices Act (FDCPA) “prohibits debt collectors from using abusive, unfair, or deceptive practices.” Under the FDCPA, a “debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis, and companies that buy delinquent debts and then try to collect them,” according to the National Association of Consumer Advocates. The FDCPA applies to personal and household debt. This means it applies to your mortgage, your car loan and your credit card.

Senators have discussed cases of predatory debt collection that include lenders sending illegal foreclosure notices, overcharges on their mortgages and notices that credit cards weren’t properly canceled. Congress is working to strengthen the laws regarding abusive debt collection, but until then service members, veterans and their families need to be aware of the Fair Debt Collection Practices Act.

Here are 3 things you need to know about predatory debt collection.

Don’t Talk. Ask for a Written Notice. A debt collector must send a written “validation notice” telling you how much money you owe within 5 days after first contacting you. In this written notice, you will find the name of the creditor and how to dispute the debt if you don’t think you owe the money.

Don’t Ignore It. Dispute It. These phone calls and notices can be annoying and inconvenient. If you know that you don’t owe any money to this debt collector, don’t ignore it. Send the debt collector a letter stating that you don’t owe this money and request that they stop contacting you. You must send this letter within 30 days after receiving the validation notice mentioned above. Keep a copy of your letter.

Don’t Be Afraid to Report Abuses. If you believe that a debt collector is targeting you and your spouse, report the problem to your state Attorney General’s office and the Federal Trade Commission. Be prepared to give them a copy of your dispute letter and documentation about any phone calls.

Unfortunately service members often are pressured with predatory debt collection. But knowing the law and your rights can prevent you from becoming a victim of predatory debt collection. Take time to study the law so you aren’t caught off-guard when predatory debt collectors call you.

Want more information about predatory debt collection, visit the Federal Trade Commission’s website.

Are You Deep in Credit Card Debt? Consider Using a Credit Counselor

09/10/2014 By Rachel Tringali Marston

There was a time in my life that I bit off more than I could chew regarding my credit limit. I was young and naive on the specifics of credit cards. I signed up for 3 different accounts before the age of 20. Of course, the credit card companies were itching for people like me. They fed me stories on how I needed to build up my credit history and establish a good foundation for the future.

Should Military Families Use a Financial Consultant?

Military families should work with nonprofit debt managers to reduce their credit card debt.

What they neglected to say was their extremely high interest rates and the actual importance to pay off your balances in a timely manner. Otherwise, you’d be accruing more interest and adding to your debt. Years passed with me just paying the minimum payments with all my credit cards at near max. If I continued to pay my credit cards at the minimum amount, it would have taken me 25 years to pay off the remaining balance.

Despite conversations with my credit card companies, I had to take additional action. It got to a point where I was drowning in my credit card debt and I didn’t see an end in sight. I wanted to find a way to get myself back on track and eliminate my debt as well as learn some safe credit card habits. So I researched ways and programs that could help me.

Are you deep in debt? Here are debt and credit counseling tips for military families.

Military OneSource provides free financial counseling. All you need to do is give them a call and they can walk you through options that could help you negotiate a reduced rate with your creditors and offer basic education on money matters, including debt management and things as common as setting up a budget. They can give you the foundation to tackle your goals and become debt free.

Another great option is enrolling with a debt management organization, which is the route I chose to take. You are assigned a credit counselor that is familiar with your situation. I wanted the ease of a single professional guiding me through the process and also a company that took care of negotiating with my creditors on my behalf. I made 1 payment to my counselor and they allocated the appropriate funds to each creditor.

Everything was simplified to me by my debt counselor, down to the penny. Because they knew my financial history, I was able to get a thorough explanation as well as a very streamline approach to be successful. I really liked having everything mapped out for me and finally seeing the light at the end of the tunnel.

I sat down with my counselor to evaluate what was possible with my income minus all my living expenses. Even with the small fee the debt management charged, they were able to negotiate a payment plan with my creditors that would have my debt paid off in 5 years (instead of the calculated 25). That to me was a win-win situation.

Want to win a $50 commissary gift card? Register to win with MilitaryShoppers.

Be very careful with shopping around for a debt management counselor, especially if you’re going to do it outside of Military OneSource or any other military, veteran or government entities. Basic signs for a credible organization are that they are a member of the National Foundation of Credit Counseling (NFCC) and the Association of Independent Consumer Credit Counseling Agencies as well as backed by the Council of Accreditation. Another telltale sign is that they are a nonprofit organization.

Military Service Members and Debt: How to Get Out

I needed to eliminate my debt as well as learn some safe credit card habits.

Debt management companies as well as accredited counselors are there to help and inform consumers. At first, it was very intimidating for me, especially because I had no financial background or any previous education. After discussing my credit card debt in depth, I felt confident and looked forward to reducing my debt and saving for the future.

You don’t have to limit yourself to the payment amount that was calculated by your debt counselor. If you can pay a little more each month, wiggle it into your payment schedule and it’s possible to pay the credit card debt faster than your plan. When I received my tax deductions, that’s when I added more to my payments and finished off my debt counseling plan earlier than 5 years.

In addition to knocking down the time it would take to payoff the debt, Debt management company taught me safe credit habits. The last thing I would want is to be in a similar situation again.