If you have excellent credit, this card is a solid choice for earning no-fuss cash rewards, especially if you’re linked to the military or willing to keep a PenFed checking account. In those cases, you’ll get a very competitive 2% cash back on every dollar you charge, and the funds are credited straight to your bank account or credit card statement. For everyone else, the cash-back rate is still a respectable 1.5%.
Potential for a very good 2% cash back
PenFed membership required
High spending requirement to earn the modest new-cardholder bonus
No introductory rate on purchases
- Low APR: The variable APR on this card is better than most. Even the high end is well below the average for a cash-back card. While we don’t recommend carrying a balance on your credit card, if you unexpectedly have to do so, this is a good card to have.
- Minimal fees: This card doesn’t charge an annual fee or foreign transaction fee, which means you have the ability to avoid fees completely, depending on how you use the card. Even the late fees—$10 to $25, depending on your balance—are more reasonable than on many cards.
- Potential for a very good 2% cash-back rate: It’s pretty unusual to be offered 2% of every purchase in cash back, and you’ll automatically be eligible for this rate if the primary applicant is a current or retired member of the armed services. Even non-military applicants get 2% if they open a checking account with PenFed.
- PenFed membership required: While anyone is eligible to get the card (regardless of military status) you must become a member of the credit union as part of the application process. This means having a savings account with at least $5 in it, which isn’t a lot, but it’s still a hoop to jump through.
- High spending requirement to earn the modest new-cardholder bonus: The $100 statement credit is a smaller bonus than you’d get with many competing cash-back cards, and you have to spend three times as much to get it.
- No introductory rate on purchases: If you’re looking for a limited-time 0% APR offer, you won’t get it here unless you’re transferring a balance from another card. And if you do transfer a balance, the rate doesn’t last as long as offers from other cards. (More on this below.)
Bonus for New Cardholders
You can earn a $100 statement credit by spending $1,500 in the first 90 days you have the card. This is half of what you’d get from some competing cards that don’t require you to spend nearly as much.
Earning Points & Rewards
The PenFed Power Cash Rewards Visa Signature Card pays 1.5% of every dollar you spend in cash back, unless you’re in the military or willing to keep a checking account with PenFed. Then the rate is an impressive 2%. There’s no cap on the cash back you can earn, but the rewards expire after five years or if your account is closed.
The 2% cash-back rate is for members of the PenFed Honors Advantage Program. Any servicemember—on active duty, in the reserves, retired, or honorably discharged—is automatically in the program, or the cardholder can be enrolled by maintaining a checking account with the credit union. Any existing account other than a PenCheck Limited account qualifies. Otherwise you must open the company’s premium Access America account.
PenFed’s rewards can only be redeemed as cash, which keeps things simple. You can get your cash as a statement credit, have it deposited into a PenFed checking or savings account, or have it transferred to another financial institution.
However, the last option is not available if you qualified for the non-military Honors Advantage Program, because you opened a PenFed checking account that you’ll need to use.
How to Get the Most Out of This Card
If you’re not a member of the military and you don’t have a checking account with PenFed, open an Access America checking account to qualify for the Honors Advantage Program and maximize your cash back. (Just make sure you have a daily balance or monthly direct deposit of at least $500, or you’ll have to pay a $10 monthly fee.)
You can transfer a balance under the promotional rate until September 30, 2020, but if you do, keep your card in your wallet until you’ve paid off the transferred amount.
Otherwise, any new purchases will begin accruing interest as soon as you make them, even before you get your bill.
The reason? Anyone who takes advantage of the balance transfer promotion also forgoes the normal grace period on new purchases until the entire transferred balance has been repaid. These unavoidable finance charges—assessed even if you pay off any new purchases as soon as you get your bill —would eat away at the interest you’re saving on the transferred amount.
This is a problem common on cards that offer an introductory rate on balance transfers but not on new purchases.
Of the credit card perks we’ve selected for their exceptional value, there’s one that comes with the PenFed Power Cash Rewards Visa Signature Card:
- Travel accident insurance: This automatic coverage applies to you, your spouse, and unmarried dependents when the full travel fare is charged to your credit card. The benefit of up to $250,000 kicks in if there’s accidental death or dismemberment while you’re passengers on a flight or other covered trip.
- Extended warranties
- Insurance for stolen or damaged purchases
- Rental car collision insurance (secondary to your own policy)
- Roadside assistance hotline
- Travel and emergency hotline
- Concierge for booking event tickets, travel, and other services
- Sports, music, and event ticket presales, plus VIP access at some events
While PenFed doesn’t offer any fancy customer interfaces like online chat, it does have a mobile app that can be used to manage all accounts with the credit union.
This card comes with industry-standard security features such as chip technology and fraud monitoring.
PenFed stands out for its reasonable fees on credit cards. There’s no annual fee or foreign transaction fee, and the late fee is lower than on many cards. You’ll be charged up to $20 if your balance is less than $1,000, up to $25 if it’s $1,000-$2,000, and up to $28 if it’s more than $2,000. As with many cards, you’ll pay a 3% fee for balance transfers.