PenFed Power Cash Rewards VISA Signature Card Review

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%.

• 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, 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 2% cash back: 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 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. At a minimum, this means having a savings account with at least $5 in it. 
• High spending requirement for small sign-up 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, you’re better off avoiding any new purchases until you’ve paid off that balance. (More on this below.)

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 on some competing cards that don’t require you to spend nearly as much. 

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.

PenFed’s rewards are strictly redeemed as cash, so there’s no worrying about how much value you’ll get for different redemption options. You can get your cash as a credit to your balance, have it deposited into a PenFed checking or savings account, or have it transferred to another financial institution. (The last option is not available if you qualified for the Honors Advantage Program because you opened a checking account.)

If you’re not a member of the military and you don’t have a checking account with PenFed, open an Access America 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 March 31, 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.

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 are a passenger 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

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 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 $10 if your balance is less than $1,000, up to $20 if it’s $1,000-$2,000, and up to $25 if it’s more than $2,000. As with many cards, you’ll pay a 3% fee for balance transfers and a 5% fee for cash advances, with a $5 minimum.