The U.S. Department of Defense issued proposals in September to protect veterans from predatory lenders — with good reason. They’re far more vulnerable to financial problems than the rest of the population.

When service members return from active duty, they’re more likely to face severe financial challenges than civilians. That’s why the Obama administration and Department of Defense want to tighten rules (pdf) to help protect military service personnel from loan sharks. Included in the proposals, for instance, is a new rule that says creditors may not charge an annual percentage rate of more than 36% on all consumer credit; this previously only applied to payday loans, vehicle title loans, and tax refund anticipation loans.

Service members are more likely to have financial troubles. They are almost twice as likely to carry some credit card debt from month-to-month (58%) than civilians (34%), according to a recent survey carried out by the National Foundation for Credit Counseling and Pioneer Services, a division of MidCountry Bank in Bloomington, Minn. What’s more, twice as many service members as civilians have paid less than the minimum required payment in the last 12 months (6% for service members versus 3% for civilians), the survey found.

Veterans also appear to be more pessimistic about their financial future. A majority (55%) believe they are ill-prepared for a financial emergency, the study found. (Only 43% of the general population was concerned about not having enough savings for an emergency, a separate 2013 survey by the NFCC found.) “Men and women in uniform face many challenges and daily sacrifices while serving our country — financial concerns shouldn’t be one of them,” says Susan Keating, president and CEO of the NFCC.

Perhaps more surprising, however, is how even minor financial issues can spiral into bigger problems for veterans. Military veterans who report having relatively minor financial problems, such as bouncing a check or going over their credit limit, are four times more likely to become homeless within the next year than veterans without such problems, according to a survey of 1,000 Iraq and Afghanistan veterans published in the American Journal of Public Health last year.

Though there are resources for veterans who need them — the National Association of American Veterans and U.S. Soldiers Foundation help them access health benefits and finances, and USA Cares aims to help veterans prevent foreclosure/eviction and provides financial aid — some 30% of veterans in the survey said they’d gone over their credit limit, bounced or forged a check, been reported to a collection agency, or fallen victim to a money scam within the last year, the study found.

One theory for the financial challenges: The winding down of the wars in Iraq and Afghanistan came at a challenging time for the U.S. economy. The transition to civilian life after a harrowing experience in Iraq or Afghanistan — especially in a choppy job market, has been a challenge for many veterans, according to a 2012 survey of 2,453 service members, 1,845 of whom were veterans of the second Gulf War, carried out by Prudential Financial Inc. for the Iraq and Afghanistan Veterans of America.

Two-thirds of veterans also experienced a difficult transition from military to civilian life and nearly half did not feel ready to transition, the survey concluded. Difficulties are largely attributed to unemployment and health challenges, it found. Two-thirds said they are facing a health challenge as a result of their military service. As a result, many expressed the need for time to figure out what’s next in their lives or simply have time to “decompress” after their period of military duty.

Access to proper health care is also critical. Veterans with post-traumatic stress disorder, major depressive disorder, or traumatic brain injury typically have lower income and employment levels, according to a 2012 study, “Financial Well-Being and Post-deployment Adjustment Among Iraq and Afghanistan War Veterans,” published in Military Medicine, the international journal of The Society of the Federal Health Professionals. That finding is consistent with other research on veterans in the U.S. and U.K., says Eric Elbogen, a co-author of the study and associate professor of psychiatry in the University of North Carolina School of Medicine.

Explaining how their military experience translates to skills in the civilian jobs market was a “consistent theme” for veterans and a barrier to employment, says Lauren Augustine, legislative associate at the Iraq and Afghanistan Veterans of America, a non-profit advocacy group dedicated to U.S. veterans of the War in Iraq and War in Afghanistan. “It’s a life transition, a change of health care, location and their lifestyle.” In fact, 69% said they consider “finding a job” the greatest challenge in transitioning.

Some companies have been proactively hiring veterans, however. Big-box retailer Wal-Mart Stores Inc. WMT, -1.02% , for instance, has pledged to hire 100,000 veterans by 2018. Last year, the company said it will offer a job to any veteran in his/her 12 months after active duty in stores. “Hiring a veteran is smart business,” Cory Lundberg, spokesman for Wal-Mart. “They are highly trained and have outstanding leadership qualities.”

This story was originally published on May 21, 2014, and updated on Sept. 29, 2014.