17 February 2014

Navy: Watch out for debt advice, it's a fraud | RallyPoint.com

By William Cole
Copyright 2014 The Honolulu Star-Advertiser

A tactic to reduce credit card balances and other debt that's making its way around the Internet is being called fraud by a Navy lawyer at Pearl Harbor, who advised in an email that sailors steer clear.

The problem: the interest-reduction program applies only to debt incurred before joining the military, not before the service member's most recent re-enlistment.

The Feb. 6 warning by Lt. Elizabeth K. Buff, staff judge advocate, wasn't helped by an online article Wednesday in All Hands, the official magazine of the Navy, which extols the money-saving advantages of the activity that Buff sought to debunk.

"OMG!!! (Oh, my God)," Petty Officer 2nd Class Meaghan Biery was quoted as posting on Facebook. "Just got notification from (my credit card and auto loan company) that all but 6 percent of the interest from all accounts is being credited back to my account."

The article, which follows other similar Internet advice, discusses using a re-enlistment to take advantage of the 2003 Servicemembers Civil Relief Act to lower interest rates on credit cards and loans.

The All Hands article quotes sailors saying they're saving thousands of dollars.

The law is intended to ease financial burdens on service members as they enter the military on active duty, or are called up to active duty from the reserves for more than 30 days.

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