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6 Reasons You Shouldn’t Get The Military Star Card!

In this article, we break down the Military Star Card and everything it has to offer. You usually get hooked when you are at the PX, BX, or MCX and want to save 10% on a TV or computer. At the moment, you may think you are getting a good deal when it comes to credit cards. I mean, saving $150 is pretty sweet on a $1,500 purchase. There are much better options out there! For example, when you learn about the opportunity to get 60,000 bonus points that are valued at $900 in reward travel with the Chase Sapphire Preferred, then you will quickly realize the 10% savings isn’t that great of a credit card offer. Or, consider the Captial One(R) Venture(R) Rewards Credit Card. Both of these are much better options and they wave the annual fee for active duty military.

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Has anyone ever told you that the Military Star Card is your best choice for a credit card? We will give you a hint–no–not even close. There are several options that will actually give you a ton of benefits.

Okay: You can get a 10% discount for first-day purchases. How is it as a long-term investment, though? Should you use it to build up your credit?

We’re not out to skewer anybody, but our first loyalty is to you, the reader. That’s why we’re out to answer these questions as honestly as we can for your sake. We’ll be taking a look at the good, the bad, and the in-between. The decision, from there, will be up to you.

Military Star Card Basics

Let’s start with the basics. The Military Star Card is a product of the Exchange Credit Service (ECS). This is in partnership with the Army and Air Force Exchange Service (AAFES), who manages it. It comes with a private-label credit line and no annual fees. It also allows you a percentage off of services on-base at certain exchange-operated businesses. To ECS and AAFES’ credit (in terms of reputation), it’s pretty straightforward. We also like that there are no hidden fees to speak of.

Across all branches of service, there are over 1.5 million Military Star Card holders. Some estimates say that in 2017 alone, the card generated $445 million in value. The ECS, like AAFES, contributes a significant portion of its earnings to Morale, Welfare and Recreation (MWR) programs. They provided nearly $640 million to them recently over a 10-year period. We may not have figures for exactly how much of those funds the Military Star Card generated. However, it’s probably safe to assume that its revenue factors in somewhere. 

6 Reasons You Should Not Get the Military Star Card!

Military Star Card Image

Reason #1 You Can Only Use The Military Star Card on Base

Marketed to armed forces personnel as a “one card solution” for anything you need to buy on the base, it has obvious perceived curb appeal. That’s a good thing, since it can only be used in stores that are exchange-operated. That is a very important point when you start to weigh the benefits of this card verse a card such as the Chase Sapphire Preferred. The Military Star Card can only be used for shopping on base whereas the Chase Sapphire Preferred can be used anywhere.

While you’re within range though, the perceived convenience is definitely tempting. AAFES released an accompanying app for smart devices, ‎MILITARY STAR Mobile, in November of 2018. Cardholders can use it to view their account status, receive push notifications, review transactions, make payments, and more. But, isn’t this something the other banks like American Express, Chase, USAA, or even Capital One has been doing for about 10+ years now?

Reason #2 The Rewards are Awful

You don’t have to be active duty to apply, though. Dependents are eligible, too. Successful applicants can gain 2 points per $1 spent shopping at exchange facilities or armed forces Recreation Center resort hotels. Additionally, you can earn points at exchange food courts, mall vendors, and express locations. When you’re online, the same applies: You can rack them up at sites like,, and, too. After approval, the points start accumulating that same day. If you rack up 2,000 of them, you’re awarded a $20 MILITARY STAR Rewards Card. That works out, roughly to a 2% purchase reward (or a $1 of value for every $50 spent).

Again, compare this to the Chase Sapphire Preferred where you earn 2x points for every $1 spent on travel and dining. When you add the additional value of the Chase Ultimate Rewards, this equates to around $2 for spending the same amount. I know it doesn’t sound like much, but it is double! Now add in the flexibility in being able to redeem it for almost anything from airfare, hotels, and even turn it into cash (we don’t recommend this), then the Military Star Card rewards are awful if you compare it to what credit cards are available on the market right now.

Reason #3 You Have Extremely Limited Options to Use Your Points

We can’t recommend going into debt for them, but in theory, you can earn as many of those rewards cards as you want each year. Points are a little different, though. They can’t be redeemed for cash, credited to your account, used to purchase gift or e-gift cards, or applied to previous purchases. You’re not allowed to sell rewards, either—and you can blow the card agreement by trying (which means losing all unused and unexpired points). As long as you color within the lines though, your points won’t expire. As long as you keep making a purchase using the card at least once a year. Compare that to the Chase Sapphire Preferred, where your points never expire.

Reason #4 They Can Take Money From Your Paycheck

We’d recommend using caution against running late or going over, however. Either of these can hurt your credit score. Also, since AAFES is the Army and Air Force Exchange, your supervisor will likely be informed if you start missing payments. They do expect you to pay for your purchases and they have been known to have wages garnished from those who let things go too far.

Look, you are into a lot of trouble if you start getting behind on any credit card. That is why we recommend you only check out credit cards if you can handle them responsibly. You must pay them off each month to really take advantage of the benefits. It wouldn’t be honest to tell you about the few things we like without mentioning all of the less impressive stuff. We wouldn’t be looking out for you by sugarcoating any rough spots, so we’re not going to. In no particular order, we’ll discuss things that—might not necessarily be deal-breakers, but—you should know about before you sign up.

We never recommend deliberately defaulting on a credit card anyway (because it’s dishonest, among other things). For starters, however, it bears saying this again: If you default on a Military Star Card, you will dig yourself into a truly deep hole. Again, not something we recommend! Otherwise, AAFES’ legal team has the deck stacked to make sure that you will pay back every dime you owe.

In a nutshell, they’re a business run by Uncle Sam’s family. So stiffing them means, indirectly, stiffing the U.S. federal government. We’re not highlighting this as though it were a shortcoming on the part AAFES or the United States. Nevertheless, if you drop the ball as a Military Star Cardmember, you could come to consider the relationship as a serious drawback. Don’t say that we didn’t warn you.

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Reason #5 You Cannot Take The Card With You When You Leave The Service

There’s also the issue of losing the card when you get out. Once you separate from the military—as of the publication of this post—that’s it. The account is terminated with no option to renew or continue it as a civilian. While we can understand why AAFES would want to handle things this way from a business perspective, it’s not great for someone looking to (re)build their credit score.

If you’re wondering why, the answer lies in the fact that the big credit bureaus prefer to see people keep their accounts open as long as possible. Where the rubber meets the road, this establishes a positive track record. The longer you keep a card—always making your payments on time, paying more than your monthly minimum when you can—the more your credit rating will improve over time.

The opposite happens, predictably, when you close/lose an account. It’s not like you’ll get punished for closing a card you don’t need. But, all that good history you’ve established is essentially lost. If your credit was good or excellent beforehand, that’s not a big deal. If you barely qualified for the card in the first place, however, you’ll be back where you started, crappy-score-wise. You’re not super-glued in place down there, but the clock does reset.

Reason #6 The APR is Absolutely Ridiculous 

AAFES doesn’t charge cardholders an annual fee or a late fee, but we never said they don’t charge any fees. Like any other credit card, the Military Star Card does have an annual percentage rate. An October 2016 report describes it as the lowest flat rate among its retail-branded competitors. Word on the street is that it’s 12.24-25%.

If you had a balance of $1,000 for example (and it’s all from regular purchases), your minimum monthly payment will be about $28 (or $27.77, rounded up). Any interest fees will be $0.50 or higher. That interest is avoidable by just paying your balance off 100% by the due date every month. However, it’s still something to think about before you apply. The due date will run at least 25 days after each billing cycle’s end. 

If you buy things under the Military Clothing Plan, 12.5% of your unpaid balance is going to be your minimum payment. There is also a returned payment fee of $25. If you don’t pay the full amount of a total minimum payment that’s due within 60 days of its due date, you’ll have a penalty rate of 20.24%. 

That rate spike isn’t permanent, but you’ll have to make 6 consecutive payments on time before they’ll remove it. Half a year is a long time to carry a burden like that on your budget. It almost goes without saying that you’ll be much better off not letting things deteriorate to the point of having to do that. 

You really don’t want a mass of debt awaiting you once you’re out, either. Any outstanding balance on your account after your separation from service will be considered your responsibility. Even if your credit score dips when the card account is terminated, you will still be expected to pay any outstanding debts from it.

What Are The Benefits Of A Military Star Card?

The rewards program isn’t all there is to see when it comes to the AAFES’ card’s perks. Cardholders receive continuing military discounts, like 10% off food court fare and $.05 off every gallon of gasoline purchased. Shipping is free, too if you choose standard at or We’ve already mentioned the first-day discount, which nets you 10% off purchases on the day that you’re approved. They’ll show up later as a credit on your first billing statement.

The Military Star Card’s Annual Percentage Rate can be more agreeable than other credit cards’ APRs, too. Your credit score doesn’t affect it. So, if you’ve made a financial mistake in the past, you don’t have to keep paying for it now. You will have to pass a credit check to get approved. Meaning that if you have at least an average credit rating when you apply, you’ll likely be approved. Once you’re accepted, however—even if you barely squeaked by the qualification phase—your score won’t affect your interest rate. AAFES’ card has one rate for all cardholders, regardless of their FICO score.

Whenever you need new uniforms and equipment, you can buy them from exchange-affiliated stores at 0% APR, too. You can’t do this anywhere else; military item purchases from other vendors aren’t eligible. Keep it within the system, however, and you can get up to $500 worth of eligible clothing, interest-free.

Sometimes interest charges get reduced on a temporary basis for personnel who are active duty or deployed, as well. When you return from your deployment, however, they return to the rates that were in effect when you left. It’s nice while it lasts, though. Either you or designated representative for you will need to provide a copy of your activation or deployment orders by fax, email, or physical mail to qualify. However, the American Express Platinum and Chase Sapphire Reserve have this same benefit. Nolan, MilitaryTravelPro’s founder, has had a 4% APR on his Chase Sapphire Reserve since he has had the card because of the SCRA benefits.

Take a Look At All of the Better Options

We can’t say that we’re looking out for your best interests if we don’t mention an alternative card or two. The market, thankfully, is still free to date, so there’s a fair amount of other credit cards worth your consideration. Obviously we can’t choose which credit card you should apply for. Once we’ve shown you some of the Military Star Card’s competition though, we hope that you’ll be able to make a better decision!

You should probably have a look at the Capital One Venture Rewards Credit Card, if only for comparison. This was once primarily as a tool for travelers looking for a simple point system. But now, it appeals to a broader range of applicants. It’s the one-two punch of point transfers and also has great reviews. 

Capital One Venture Rewards Credit Card is a good alternative to The Military Star Card!

If you travel by commercial air much, on or off the job, this card could definitely come in handy. It’s pretty nice to be able to book the flight you’re after… but then simply erase the charge, if you need to cancel or reschedule. The built-in flexibility is going to maximize your ability to leverage airline reward transfers to get the most from your points. 

It comes with a pretty nice welcome bonus, too. You will receive the 50,000 miles after you spend $3,000 within 3 months of account approval. While we’d never advocate going into debt just to get rewards (because it only digs you into a hole, in the long-run), if you’d be spending that much anyway, that’s not a shabby deal. It basically comes out to around $500 in travel fees, free. Some cardholders may prefer to transfer their points in order to get a total value closer to $700, but that would be up to you. If you want to check to see if this is still the most current offers, simply click here

The Capital One Venture Rewards Credit Card has never had a reputation for over-complication. Its simplicity is what makes it a strong contender now. With basically no limits, you can earn a flat 2x miles on every purchase. Essentially, that’s 2% or so you’d get back toward your travel costs.

Capital One Venture Rewards Credit Card 10x Point Offer!

It gets better, though. Cardholders can get 10x miles on purchases made through whenever they book a stay and then pay with their Venture Rewards. That’s compatible with the existing loyalty program, too. When you purchase 10 nights, you can tack on a free night, which comes out to a return of 10% or so. This ultimately comes out to a 20% ROI when you use both together.

The purchase-erasing redemption option lets you redeem points at a rate of $.01 each toward your eligible travel costs charged within the last 3 months (or 90 days). There’s no minimum amount, either. If you want, you can lose the price of the taxes for your domestic U.S. award tickets (usually $5-$6) by redeeming 550-575 points to cover it.

If a Capital One Venture Rewards Credit Card sounds like a good choice, we’d recommend doing your homework. You definitely want to study their transfer partners to learn how you can get your best value. You could probably expect a transfer ratio around 2:1.5 (with the exception of Singapore KrisFlyer and Emirates Skywards). When you get overseas, there won’t be any foreign transaction fees waiting for you, so this might be a decent vacation choice.

That’s not all this card has to offer, but to keep this fair, we’d better take a look at potential downsides, too. Remember the numerous transfer partners mentioned above? None of them are large U.S. airlines, because these cards are best for international travel. The card’s APR doesn’t seem amazingly competitive, either when compared to its peers. If you’re not just out to travel, but out to book airline rewards travel, it’s probably not your best choice.

If you’re likely to carry a balance regularly, that’ll be strike two. We never recommend doing that with any card. But, you could get into a huge mess fast if you fall behind on a Venture Rewards. If your monthly expenses, like groceries—or even charity donations—run above average, that might be strike three: You don’t have to look far to find competing cards with better points rates for those.

Who’s The Military Star Card’s Most Worthy Competitor?

While we can’t choose for you, we can say that if we were in your shoes, we’d take a serious look at the Chase Sapphire Preferred Card. Don’t forget, they waive the $95 fee for active-duty servicemembers! You also get the sweet 2x points on global dining and travel (in addition to a point-per-dollar rate for every other kind of purchase). We wrote an entire article on this here.

Chase Sapphire Preferred Credit Card best alternative to The Military Star Card!

The sign-up bonus is 60,000 points. This occurs after you spend $4000 within your first 3 months as a cardholder. If you’d normally spend that much anyway, that’s hard to beat. Redeem it through Chase’s Ultimate Rewards portal and it adds up to $750 in travel fees, ready to roll. 

If you find out that you could get a better deal from a specific hotel or airline rewards program, can you switch? You can transfer those babies at a rate of 1:1. To say the least, that’s not something every other card issuer will let you do.

We really don’t recommend falling behind on your payments. With that said, however, the Chase Sapphire Preferred’s lack of a penalty APR means that fumbling the ball won’t hurt you as bad as it would with another card. Your interest won’t skyrocket if you miss a deadline.

If you fly mainly just a handful of times each year but wind up spending a lot on daily transportation, it could come in handy there, too. Cardmembers will receive 5 points for every $1 spent on Lyft rides until March of 2022. You can also bag a couple of points for every $1 spent on a variety of travel expenses. These include fares for taxis and buses, bridge and highway tolls, train tickets, ferry passes, and parking fees. Also, this includes campground fees too!

Chase Sapphire Preferred Travel Rewards

The Chase Sapphire Preferred has a nice array of travel partners, as well: United Airlines, Southwest, JetBlue and Hyatt are all on the list. These are all just the tip of the iceberg where this card’s perks begin, but since we’re running out of space, let’s jump to the possible drawbacks: This card isn’t perfect, but they’re noticeably few compared to most of its peers. Some could say the $95 annual fee is one, but the welcome bonus should more than make up for it during your first year.

Others might consider the 2x points rewards rate for travel and dining (with the $1:1 rate for all other purchases worldwide) a middle-of-the-road offering. The caveat to this one is the fact that the Chase Sapphire Preferred’s travel category is pretty broad. Its purchase options include hotels, airlines, car rental agencies, discounted travel sites, timeshares, taxis, cruise lines, parking lots, and more.

Look, we love good old AAFES! We’ve just heard of active duty personnel finding out that they could save 10% on a one-time purchase—and then leaping before they’d looked. It’s nice to be able to save that $150 on a TV, PC, PlayStation, or Xbox. 

With the Chase Sapphire Preferred, however, a cardholder could get what amounts to $900 in bonus points (60,000) when they redeemed them for travel at the Chase Ultimate Rewards portal. We want to make sure we cover all of your bases because the final decision is your business! Choose wisely. 

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One Reply to “6 Reasons You Shouldn’t Get The Military Star Card!”

  1. The card has horrible accountability. This was a horrible card. Completely messed up my account and credit. They have delays in payment and if when they finally take the money out of your account the money is spent they put it as a deferred payment.. the customer service reps do not communicate properly or know information that they should like what email to contact for a dispute, time frame for mailing in payments. Also if you communicate and issue and they put a note on your account the note is ignored and called irrelevant. Horrible card…would not recommend. Just get a real credit card.

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