Listen up. Do you rack up rewards points on your credit card when you make purchases? Like earning 1 percent or more cash back, or points toward free airline tickets?
If so, you probably want to use that card every time you make a credit purchase — including your purchases at the military exchanges.
The exchanges' Military Star Card does not offer reward features now. But the good news is, they're coming.
The Army and Air Force Exchange Service, which administers the Military Star Card program for all the exchanges, is developing a rewards program that can generate points for cardholders who make purchases with the card. It's scheduled to launch late this year, AAFES spokesman Judd Anstey said, with reward options that are "expected to be similar to other credit rewards programs."
The Military Star Card interest rate is currently 13.24 percent on unpaid balances.
It's hard to say whether people choose to use their bank credit card rather than a Military Star Card because of the rewards. But exchange officials definitely want you to use their card as much as possible.
When you use a credit card other than the Military Star Card, it costs the military exchanges money, and those costs are increasing, according to AAFES officials. Last year, AAFES paid more than $65 million in processing fees to banks that issue credit cards, a 12 percent increase from the previous year, officials said.
The increase is partly because of a hike in the fees charged by credit card companies, but it's also partly because bank card use has increased, Anstey said.
Since 2001, AAFES has paid more than $310 million in credit card fees — money that is not put back into the military community as exchange dividends. Usually, about two-thirds of AAFES profits go to Morale, Welfare and Recreation programs, with the remaining third going into building and renovating stores or upgrading technology.
"With 100 percent of AAFES earnings going back to authorized customers in one way or another, something as seemingly insignificant as credit card processing fees can quickly add up to a quality-of-life issue," said Harold Lavender, AAFES chief financial officer.
The Military Star Card offers other benefits to the military community, such as no annual fee and a deployment policy that allows you to lower your interest rate to 6 percent on the current balance and any new charges, with no payments required during the deployment.
Although other bank card companies are required to reduce the interest rate to 6 percent for reservists called to active duty under the Servicemembers' Civil Relief Act, the only way they would reduce an active-duty member's interest rate would be if the debt were incurred before the member joined the military.
The Military Star Card offers exclusive promotions throughout the year for those who use it. The card can be used worldwide at exchanges on Army, Air Force, Navy, Marine Corps and Coast Guard installations, to include the online store, exchange catalog and the exchange mall, as well as designated overseas MWR activities.
Shop around for interest rates
You should always compare features of credit cards to determine your least expensive options. And it's always best to pay off your credit card each month. That way, if you have a rewards card, you can put the rebates into your savings account for a rainy day or a holiday fund, or to help save up for that car you've been eyeing.
If you don't pay off the card each month, it's particularly important to shop for the lowest interest rate. Two Web sites that can help you do some comparisons are http://www.bankrate.com and http://www.creditcard.com.
Check with your military bank or credit union, too. For example, Pentagon Federal Credit Union offers a rewards credit card that gives 5 percent cash back on gas purchases and 1.25 percent cash back on other purchases. There's also a rewards card for travel and merchandise rewards.
USAA, Navy Federal Credit Union and others also offer rewards credit cards.
Check the fine print for restrictions. Some cards let you redeem points for cash each month, while others require you to wait until you accumulate a certain amount of points.
Whatever card you choose, pick the one that's best for your financial situation.
Got that? You're good to go.