PenFed Credit Cards

The Pentagon Federal Credit Union or PenFed is a credit union designed to offer traditional banking services to members of the United States military (although anyone can join for a small contribution/membership fee). PenFed offers a variety of banking solutions, including checking and savings accounts, installment loans and even credit cards at a lower rate than most traditional banks offer. What’s nice about PenFed is that it is one of the few credit unions that have locations in multiple states and abroad.

In the past, PenFed cards were offering lifetime balance transfers at a highly desirable rate. Well, with recent changes in the card industry, a lot of these offers have been readjusted to reflect the current credit and consumer climate, and we're no longer seeing evidence of those lifetime balance transfers. Still, the PenFed cards continue to be a reasonable alternative to the big bank cards that we're already familiar with.

How To Become A PenFed Member

While the eligibility requirements of this credit union state that anyone connected to the government, military or defense-related companies can be a member, the fact is that anyone can actually become a PenFed member. Here's how you can join them:

  1. Determine your eligibility as someone with defense and military associations and connections.
  2. If you don't qualify through military or government associations, you can also become a PenFed Credit Union member by simply joining the National Military Family Association and by paying a one time, low fee of $20. Membership here is open to anyone.
  3. Open a PenFed Regular Share Account with a minimum deposit of $5.

Once you're a member, you can begin enjoying their benefits, get access to their bank products and can apply for their low interest rate cards, including rewards cards for travel and cash back.

But you may want to check out other options in the following locations:
Best Credit Cards
Top Credit Card Deals
Best Prepaid Debit Cards

{ 7 comments… read them below or add one }

Neal A. Deutsch, CFP April 5, 2010 at 8:15 am

Thanks for the consumer education. As with all offers, be sure to read the fine print and above all, use credit responsibly.

ConsumerMiser April 5, 2010 at 6:05 pm

Great info. In general, I am not a fan of credit cards, but if you are going to use one, you might as well pick a good one or the best one you can find. Credit cards also help you build credit and can help you with your credit score if used wisely. On the other hand, credit cards allow you to spend money that you do not have at that moment (or at least do not want to access). As Neal says above, use credit responsibly. Thanks for the informative coverage.

Credit Girl April 7, 2010 at 1:59 pm

I’ve used PenFed for loans and they offer the best rates I’ve seen. I had no idea they were coming out with cards so I’ll have to check that out and maybe even consider it.

Ruth Liddell September 28, 2010 at 1:13 pm

Stein-Mart (stores) shared my PenFed credit card with magazine subscriptions, which I DID NOT authorize. I deducted 27.00$ from my September credit-card payment, since I was UNABLE TO CONTACT EITHER PEN-FED OR STEIN-MART. Neither was available by phone. (And I do not live close to either). I DID NOT ORDER THESE SUBSCRIPTIONS!

~ Ruth Liddell

The Digerati Life September 29, 2010 at 9:14 am

It may be better if you contact the people behind the magazine subscriptions, like the distributor or publisher. Stop those subscriptions from that end. But definitely, visit the PenFed credit union site to contact their customer service to get assistance. Good luck!

Deputy December 20, 2010 at 2:01 pm

BEWARE PenFed AmEx Travel Card. Yes it’s easy to accumulate points. It’s quite another matter to redeem them. The people at the company they hired are rude and not helpful. I’ve been trying for a week to obtain plane tickets. They told me they are forbidden to talk to customers about plane tickets. I have been told repeatedly “there is no help available”. Wish I’d gotten a cash back card.

Genna November 11, 2011 at 9:30 pm

Just fyi, PenFed isn’t like your typical bank; they currently service almost a million members from the military and defense industry, including members of the US Military, US government, American Red Cross and other associations. I like to use the travel rewards card for retail therapy, but you can use the points you earn for a whole bunch of things like travel, special events, gifts, gift cards, charity donations, etc. In this respect, it’s just as flexible as any credit card.

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How Pentagon Federal Credit Union Credit Cards Can Work For You

What are the benefits of using a Pentagon Federal Credit Card? The Pentagon Federal Credit Union offers a wide range of credit cards that address the needs of its large and diverse member population. All of the PenFed credit cards offer low interest rates along with great rewards or other perks. Here are some of the benefits you can enjoy from these cards:

  1. Lower interest rates. The average long term interest rate on a Pentagon Federal Credit Union credit card is between 9.99% and 13.74%. This is a full 20% less than what you'd be charged by using a comparable Visa card that's issued by a traditional bank.
  2. Greater Rewards. Standing among other rewards credit cards, the PenFed cards will earn you points at an accelerated rate, and will help you collect great rewards faster than you would with bank credit cards. For instance, the Premium Travel Rewards American Express card earns rewards points at a rate of 5 points for every dollar spent on travel. This is twice as many as you would potentially receive from other cards.
  3. Larger variety. Not only does the Pentagon Federal Credit Union have the ability to issue Visa branded credit cards, but American Express cards as well, giving members more options for credit cards to choose from.

While there are many benefits to carrying a Pentagon Federal Credit Union credit card, there are a few drawbacks as well. As with most other credit union credit cards, your credit card account is tied to all of your other credit union accounts. This means that if you have a secured loan with Pentagon Federal, your collateral is also used to secure your credit card account. The balances in your savings and or checking account can be used by Pentagon Federal to pay off the balance of a delinquent credit card without your direct consent. Note, however, that in most cases, you must have pretty healthy credit in order to obtain a credit card from Pentagon Federal Credit Union; also, as in the case with most credit unions, you can appeal a decline and submit documents that support your case to the loan committee for a secondary review.

Pentagon Federal Credit Union is a strong financial institution that has over $14 billion in assets. Carrying a credit card issued by PenFed means that you are a member of one of the largest and most prestigious credit unions in the nation. While other credit unions have struggled and succumbed to the pressures of the current economy, PenFed remains strong and financially solvent. So, if you're looking for a top-notch Visa or American Express credit card, think about the alternatives presented here.