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PenFed's Cash Back Credit Card Adds Another 5% Category


Pentagon Federal Credit Union has added a new limited-time cash back offer on its Visa Platinum Gas Cash Reward Credit Card. You can now receive 5% cash back for your first $4,000 of airfare purchases per month. This is a limited time promotion. Airfare purchases must be made before July 31, 2009 to qualify for 5% cash back promotion, thereafter such purchases receive 1.25% cash back.

The other cash back features of this credit card remain the same:
  • 5% cash back from gas purchases at the pump
  • 2% cash back on all supermarket purchases
  • 1.25% cash back from all other purchases
And unlike other cash back credit cards like from Citi, you don't have to wait until you have accumulated enough cash back to get reimbursed. The cash rewards are credited to you each month.

PenFed also continues to offer a good deal on balance transfers. The limited time rate is 2.99% APR for the life of your transferred balances.

A few notes mentioned by readers about this PenFed credit card:
  • One reader reported Walmart Supercenter purchases being counted as a supermarket purchase. Not all readers have reported this, so your miles may vary.
  • PenFed has been known to be tight on granting credit. A reader reported being declined due to a large outstanding balance on one of his cards. When PenFed finally issued him a credit card, it came with only a $1,000 credit limit.
  • To get the 5% cash back at gas stations, you must pay at the pump. A reader in New Jersy reported that he wasn't able to get the 5% since New Jersey doesn't allow self-service
Anyone can qualify for membership into PenFed. For these details and my experience with PenFed, please refer to my Pentagon FCU review.

Here's a list of some of the other competitive banking products offered by PenFed:
  • Competitive long-term CD yields. As of 5/10/09: 3.50% 3yr, 3.75% 4yr and 4% 5- & 7-year (see post)
  • Competitive auto loans, currently 3.99% APR 12 to 60 months, new or used (more details at this FW thread)
  • Competitive Home Equity Loans and Lines of Credit, currently 4.99% APR for up to 240 months
  • Competitive mortgages, currently 5.09% APR 30-year fixed
Accounts can be opened online, but for those who prefer branches, PenFed has branches in several parts of the country including Washington DC, Maryland, Virginia, New Jersey, New York, Colorado, North Carolina, Hawaii, Puerto Rico, Missouri and Texas.

PenFed's rating for safety and soundness at BauerFinancial remains at 5 stars (superior) based on 12/31/08 data.

PenFed is one of the largest credit unions in the US with $13 billion in assets and 846,803 members. It's federally insured by the NCUA (Charter # 227).

Thanks to the reader who mentioned this new cash back feature in the comments.

Related Posts

Andy   |     |   Comment #1
In Oregon we can't pump our own gas either, but we get the 5% with the Penfed VISA, as the worker at the station just swipes it in the pump for you.

For me this card is only bets on gas (and the airfare right now if you need it). I use Chase Freedom for groceries (3.75%). and Schwab for everything else (flat 2%).
RJM   |     |   Comment #2
Im the guy that reported getting turned down at first. Now my limit is up to $5000.

And I have confirmed multiple times via my statements that purchases at both walmart supercenter and walmart neighborhood markets count as grocery stores and I get the full 2%. Its not hard as usually, only gas and walmart are my only purchases with this card.

Someone else said they didnt get that but I just dont think they are figuring correctly or something.

I know that Chase counts both walmarts as non supermarkets and only pays 1% so it cant be the walmarts in my area only coded one way versus another way in other areas.
I do know before I got my card that I specifically asked that of penfed and got a "non-answer". They said "Visa USA decides what is a supermarket"

But when I called VISA USA, they said it was up to the issuer.

All I know is I get 2%.
Anonymous   |     |   Comment #3
To "corporatebully":

Just what does your post have to do with PenFed?
Anonymous   |     |   Comment #4
He did the same here

Anonymous   |     |   Comment #5
Pentagon Federal Credit Union also is full service, offering financial advisor assistance in their branches as well as in their two call center location. They offer investments through CUSO Financial Services under the brand name of Penfed Invest. www.penfedinvest.com
Anonymous   |     |   Comment #6
I am in NJ and have the Pen Fed gas rewards card and have received 5% back at gas stations for the last 2 years. Not sure why someone else did not get it, but the card does give 5% back in NJ.
RJM   |     |   Comment #7
Looks like my Penfed card will be getting a lot more usage soon.

Chase is royally ****ing over its freedom customers.

No more 3% on top 3 categories.
No more $50 bonus when you reach $200.

I have about $185 so far, and I cannot spend $500 by June 30th so Im ****ed out of $50. Something Ive been shooting for for over a year.
RJM   |     |   Comment #8
Not being happy with what Chase was trying to do to me, I tried to call the VP whose name is on the letter.
The of course ushered me over to someone in their executive offices (so they say)

Anyway, he went ahead and issued me a $50 credit to make up for what I would be losing.

And said he would get back with me perhaps regarding a similar plan since mine seems to be changing.

Im not holding my breath but we will see.

I hate to lose the 3% in my top 3 categories. Grocery, Phone & either drug stores or restaurants, whichever was higher.

I have always used penfed for gas.
Anonymous   |     |   Comment #9
Kudos to BankingGuy for removing the rambling, off-topic “corporatebully” post. I had the misfortune of reading it before it was killed - there's 5 minutes I wish I had back!
Anonymous   |     |   Comment #10
Kudos to BankingGuy for removing the rambling, off-topic “corporatebully” post. I had the misfortune of reading it before it was killed - there's 5 minutes I wish I had back!
Anonymous   |     |   Comment #11
And, there's another 20 seconds reading my unfortunate double post that I bet you all wish you had back! Sorry.
Anonymous   |     |   Comment #12
To RJM, at 11:47 AM, May 11, 2009 - apparently Chase is not doing this to all it's ChaseFreedom customers - your post incited me to make a quick call to confirm. YMMV.
Funny story about PenFed - several months ago I applied for a PenFed VISA & was declined. In the meantime I had excised from my credit record 1 small, 30-day incorrect listing of a late payment (from Chase, by the way, although not ChaseFreedom). A few weeks ago, a rep. from PenFed called out of the blue to offer me a “pre-approved” card - I had not re-applied. Having been through the “pre-approved” game before when I had many balance transfers in play (I still have a few), I figured that I would be declined later when the hard pull happened. But it didn't happen - they gave me a $50K limit, with the 2.99% lifetime balance transfer offer. Now I'm trying to figure out whether to use it for purchases or to transfer a balance.
I get the impression recently that PenFed and a few other healthy CUs are hoping to expand their reach in bankcards since they see the major banks withdrawing in that niche.
Anonymous   |     |   Comment #13
To Anonymous 6:59 PM

Perhaps you haven’t received your Chase letter yet. I received mine today. Like RJM I’m upset because I am very close to receiving the additional $50.00 bonus on a $200.00 redemption. However, there is no way that I will be able to hit the $200.00 by next month. (By the end of the summer “yes,” by next month “no.”) Thank you RJM for your idea of calling the VP. I think I’ll give that a try.

I'm also not too happy about them cutting out the 3% cash back categories and making everything 1%.
Anonymous   |     |   Comment #14
My son is about $12.00 away from the $200.00 cash back mark, where he can get a $50.00 bonus. With Chase doing away with this bonus next month I suggested to him to go buy $400.00 worth of Kroger gift cards. He will receive a cash back bonus of $12.00 on the purchase of the gift cards to put him over the $200.00 mark. By hitting the $200.00 mark he will be able to get his $50.00 bonus.

Kroger gift cards never expire and you can use them for groceries and gasoline purchases (plus there are no fees involved with the cards). Since he always buys his gas at Kroger it is no big deal to buy some gift cards now. It’s better than losing the $500.00 bonus!
Anonymous   |     |   Comment #15
Oops! I meant losing a $50.00 bonus in the above post, not a $500.00 bonus.
rjm   |     |   Comment #16
The # I called was 302 594-4000 and I asked for Deb Waldon.

Im pretty sure they dont give you to someone in the executive offices but you get someone more inclined to help you than "regular" customer service.

My guy gave me an 800# of 888 622-7547.

I did a brief search and apparently they did this to some customers back in Nov.

But I have TWO chase accounts, One that I use regularly and another which hasnt been used in many months, since the last 0.99% balance transfer thing. May have been 6-12 months ago.

Anyway, I got the IDENTICAL letter for both accounts today.

Which suggests it has nothing to do with usage.

My credit score, is 762 at Credit Karma which I guess is about in the top 15th percentile. Ive never checked it anywhere else.

I was thinking about buying a Publix giftcard to make sure I got to $200 before he said he was giving me the $50.

The problem with that is its just like cash and if you lose it, its gone. I hate carrying giftcards for that reason. (I have $50 in Walgreens register rewards that expire in 2 weeks and probably $25 in CVS ones that expire in 2-3 weeks)

I may still go ahead and do it. It sounded like he was just issuing a credit to my account rather than adding it to my existing rewards balance. Just checked. Sure enough, I have a $50 "courtesy adjustment" showing.

By my rough calclulations, roughly $300 in 3% purchases might put me at $200 so I might be able to "double dip" the $50. Thats worth the risk of losing the giftcard I guess.

I do hope/expect them to offer me something somewhat similar. By me, I dont mean Im all that special but just because I have reasonably good credit and told them very frankly I would either cease or cut back using the card dramatically if they didnt come up with something.

I wasnt mean about it and said I realize that Chase has to do whats best for them, but so do I.

What do you guys think ? Is it unethical for me to go for the $50 twice ?

I guess they might catch it on there end but maybe not.

I think I will call Discover and see if they have anything decent for grocery/drug store and Phone bill charges.

In the past, they werent willing to offer me anything other than a 5% gas card but Ive already got that at Penfed so no need for another.

I rarely carry discover because I dont like the short team offers.

PS, regarding Penfed, when I was first turned down, I had like $40k+ in CDs with them. Later, when I was asking for a limit increase, I had nearly $90k in CDs and it was still like pulling teeth to get it raised to $5k.

And its not like I will ever spend that much in a month, I was just wanting to be proactive regarding not using too much of my available credit.
tuphat   |     |   Comment #17
For anyone needing to generate usage without really spending, the US Mint $1 Coin Direct Ship Program makes a lot of sense. See FW thread below.

Anonymous   |     |   Comment #18
If you don't want to go the “giftcard” route for fear or losing it or whatever, and you don't want to mess with receiving coins by mail (which is not a bad idea for some scenarios - there is no markup), then buy some clearly returnable item that causes your ChaseRewards to just clear $200, get the $250 check, then return the item. You'll have a slight negative Rewards after the return, but not enough to offset the $50 bonus you made. It's a little bit of a “scheme”, but not much more so than Chase's elimination of the $50 bonus in the first place.
Although as I said above I called Chase yesterday and was told my $50 bonus and 3% are still safe, thanks to the above posts I'll be on the lookout for changes...
RJM   |     |   Comment #19
Ive done the coins before. I think Im maxed out on the chase card. Plus, you never can tell how long before they bill you or ship.

I forgot that I will be paying for a bridge on the 19th which, with other purcahses will put me at $200 sooner than without that large purchase.

But, I still have some hope that they can "reverse" the decision or something since apparently they are not doing it to everyone.

Just afraid that if I make a fuss about it, they might realize that Im getting the $50 twice. (If that indeed works)

To the guy that says he account is still good, do you carry a balance ?

I never have.
Anonymous   |     |   Comment #20
I do not carry a balance.
RJM   |     |   Comment #21
My rep got back with me. Said they have a similar card that offers 3% in 3 categories but it appears it will be phased out very soon also.

I noted that someone here said they havent been notified and have indeed been told it hasnt happened to their account. He said it will, that they are doing it in waves.

My current deal lasts through 6/30 and then its over.

I will be using my Penfed for 5% gas rebates (as before) and groceries at 2%.

But, I am very seriously considering applying for a Fidelity Amex which gives 2% on everything. But, of course is not usable at as many places.

Bank of America is the sponser. The same folks that slashed the limit of my mastercard in half from roughly $42,000 to roughly $21,000.

I called and the rep said that wouldnt preclude me from getting the Amex but I have to wonder. It may be that they just deny me.
rjm   |     |   Comment #22
Sorry, he said they have a similar card with a $30 annual fee but he cant guarantee how long it will last.

I read on slickdeals that they are still offering this card in branches with a $50 bonus when signing up with a checking account.
Pushing it even.
mk   |     |   Comment #23
If you pay your cell phone bill with PenFed's visa you get cell phone protection against theft and repair. You need to sign up before.
Anonymous   |     |   Comment #24
I just called Chase. CSR said for regular Chase Freedow accounts, EVERYBODY is being converted by June 30. If you haven't received the letter yet, you should be getting one soon. However, for Chase Freedown Exclusive (with checking account), currently no change is planned.
Anonymous   |     |   Comment #25
Use Paypal to send a payment to a fictitious email address. Wait for rewards to post and to receive reward check. Then cancel the transaction through Paypal. Obviously, only do this if you are planning to cease using your Freedom card since it will put your rewards in the negative after you're done.
Anonymous   |     |   Comment #26
Few questions about the $50 bonus. I like the gift card idea, but can someone confirm if Chase gives you 3% or 1% credit for those cards? Also, my statements close about the 5th of the month, so if I don’t get these purchases in before my June 5th statement, does that mean I won’t get the credit for purchases made in June, because they will show up on my July statement? This would mean that I only have until June 5 to get to $200 and not June 30th like they claim.
Anonymous   |     |   Comment #27
If your PenFed application for the Credit Card is declined, are you still changed the $20 membership fee? (if option 7 is the only one you qualify for)
mo   |     |   Comment #28
Sooo... it looks like you have to be a PenFed CU member to qualify for this credit card, and the CU is only open to military?

Does anyone have any recommendations for a good card like this for us non-military folk? I just got my ChaseFreedom letter, and I'm irritated that I'll be penalized for my good credit. I'd like to stage my protest by cancelling my Chase card... but I've gotta find another card to open first.

Thanks for any suggestions.
Anonymous   |     |   Comment #29
To mo,

You do not need to be military to join PenFed. I joined without being a member of the military. Click on their “How to Join” link. Option #7 lets you join the National Military Family Association. You don’t need to have a family member in the military to join. Anyone can join. You then have the choice of choosing a one year, three year, or lifetime membership. Choose the one year because once you’re a member of PenFed you don’t need to renew the membership for the National Military Family Association. So, a one time fee of $20.00 will get you in for good.

To Anon. 3:22pm

I think you need to first be a member to apply for a credit card. But beware! I just called PenFed to verify if it is true that one needs to send in a copy of their tax return. He told me not everyone does, the computer system selects which ones need to send in proof. If selected, he told me that one would need to supply PenFed with the last TWO years of tax records!!! I told him I’m not willing to do that just to get a credit card. Also, it is a hard credit pull, not a soft one. I asked if they are planning on scaling back their cash rewards like other banks and because of the passage of the new credit card laws. He said that he can only speculate, but he doesn’t foresee them lowering their cash back rewards because they are set up differently than a bank. They are, and have been in the past, more selective as to whom they grant credit.
Anonymous   |     |   Comment #30
RateBrain looks like a nice site for finding the latest rates.

Have others used it? What do you all think?
novakjozsefne   |     |   Comment #31
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