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First post by long time lurker. I've learned a lot from the knowledge shared on this forum - thanks.

Letter I received today says the PenFed Cash Rewards variable APR will be reduced to 9.99% (from 13.99%) effective with the first billing cycle after January 15, 2012. Also, effective February 1, 2012, reward rate for gas purchases stays at 5% but drops from 1% to 0.25% on all non-gas purchases.

In the same letter, they're announcing a new PenFed Platinum Rewards Card (Visa) with 5 points per dollar on gas, 3 points per dollar on supermarket, and 1 point per dollar on all other purchases. Effective February 1, 2012. Points can be redeemed for merchandise, travel, gift cards, or Visa prepaid cards. This includes a limited time offer "...jumpstart your rewards by earning 5,000 points the very first time you use your card and another 20,000 points when you spend $1,000 within the first 3 months. That's $250 that you can use toward merchandise, gift cards, and other rewards. Or, you can use your points for other easy-to-redeem rewards, such as merchandise, gift cards, or travel."

To switch from cash rewards to the new card go to PenFed.org/MoreRewards. "You will receive more information about tracking and redeeming your points once your switch becomes effective in February."

On the PenFed web site, I didn't find any references to the Cash reward changes or references to the new rewards card.

Member Summary
Most Recent Posts
Love this Card. Get 3x the points at Target and Wal-Mart with each purchase.

bigdinkel (Mar. 09, 2013 @ 9:10p) |

I did something similar. I had converted my card and then recntly re-applied for the cash rewards card however was tur... (more)

pgrey98 (Mar. 10, 2013 @ 7:20a) |

Speaking about pay at the pump and Chase freedom, I filled up at the pump at a Wawa stationin N.J. and did not receive 5... (more)

cashbackcardsonly (Mar. 10, 2013 @ 7:32a) |

Rewards website: http://www.penfedplatinumrewards.com/

Details at http://penfed.org/morerewards

FAQ
Q. Do I have to switch to the PenFed Platinum Rewards Card?
R. No, the choice is entirely up to you. We are just providing you with the option to switch, if you are interested.

Q. The value of Cash Back is easier to understand than the value of points. What would my points be worth in the PenFed Platinum Rewards program?
R. A lot of point rewards programs are tricky but PenFed designed the PenFed Platinum Rewards card to be very simple. Each point you earn is worth $.01 (a cent) in terms of value. For example, 5,000 points would be equal to $50, which you can put on a gift card of your choice, including a pre-paid Visa® card that can be used like cash anywhere Visa is accepted, or use towards brand-named merchandise or travel rewards.

Q. How will I be able to redeem my points?
R. You will easily be able to track and redeem your points online or via phone.

Q. Is the PenFed Platinum Rewards Card better for me than my PenFed Platinum Cash Card?
R. Yes, in terms of the ability to earn rewards. The PenFed Platinum Rewards Card not only offers bonus points for gas but it also offers bonus points for supermarket purchases and a point for all other purchases. Remember, the points are worth $.01 so it is like receiving 1% "Cash Back." The biggest difference between the two programs is that the cash rewards program credits you automatically each month in the form of a statement credit while the point rewards program requires you to redeem your points when you are ready. If the automatic monthly statement credit is something that is very important to you, it may be better to keep your existing Cash Rewards card. You can always apply for the Platinum Rewards Card at a later time.

Q. What if I want to keep my existing Platinum Cash Rewards Card AND get the new PenFed Platinum Rewards Card?
R. That's great – you should keep your Platinum Cash Rewards Card open and apply for the new PenFed Platinum Rewards Card when it is available in February.

Q. Will I still be eligible for the special 25,000 bonus point offer, even if I apply for the PenFed Platinum Rewards Card instead of switching to it?
R. Yes, you will still be able to take advantage of the 25,000 bonus point offer.

Q. Can I switch back to cash rewards once I make the switch to point rewards?
R. Unfortunately, you cannot switch back to cash rewards. However, you can always keep your cash rewards card and apply for the new PenFed Platinum Rewards Card once it is available in February.

Q. What types of merchandise and gift card items are available for point redemption?
R. There will be over 1,000 brand-named merchandise items and nearly 100 well-known gift card merchants to choose from, including the option to redeem for a generic Visa® prepaid card. Additionally, there will be a wide selection of travel and experiential rewards as well.

Q. Can I see the rewards website so I know what the selection will be before I decide to switch?
R. The rewards website will launch on February 11, 2012.

Q. Can I combine my PenFed Platinum Rewards Card points with my PenFed Premium Travel Rewards American Express® Card points?
R. Unfortunately, you cannot combine your points between programs at this time.

At the least I'll ditch the Visa, though not necessarily for the Visa Rewards card. I wonder why they're doing this, the Visa is a hugely popular card.

So the new card uses points. Combinable with the points earned with the PenFed Travel AMEX? I've got about 28k of those points. If they all combine into one pool of points, that would be handy for me.

offer webpage said: you can jumpstart your rewards by earning 5,000 points the very first time you use your card and another 20,000 points when you spend $1,000 within the first 3 months.

That's ambiguous. Is that 3 months starting today (12/28/11)? Or Feb. 1, 2012? or the first day of the billing cycle after Feb. 1, 2012?

I signed up and will use the card once and see what they show on their website. I have another credit card deal cooking so I will wait until February to start the $1000 spend.

Does 5 points still equal 5% cash equivenlent? What is the minumum redemption amount? Only thing I use my PenFed card is for gas. Use Fidelity AMEX and VISA for everything else. Nice that PenFed credits your points on every statement.

If they give you all this info after you register your card someone do some screen shots or copy and pasting.

Onenote said:   offer webpage said: you can jumpstart your rewards by earning 5,000 points the very first time you use your card and another 20,000 points when you spend $1,000 within the first 3 months.

That's ambiguous. Is that 3 months starting today (12/28/11)? Or Feb. 1, 2012? or the first day of the billing cycle after Feb. 1, 2012?

I signed up and will use the card once and see what they show on their website. I have another credit card deal cooking so I will wait until February to start the $1000 spend.


Like other CC offers, it will be spend $1000 within 3 months of being approved for the card. So if you submit the app today, you'll have 3 months.

mikefxu said:   Does 5 points still equal 5% cash equivenlent? What is the minumum redemption amount? Only thing I use my PenFed card is for gas. Use Fidelity AMEX and VISA for everything else. Nice that PenFed credits your points on every statement.

If they give you all this info after you register your card someone do some screen shots or copy and pasting.


If the points work like the PenFed Travel AMEX (5x points on airfare), there is a 5% equivlent. I typically redeem for airfare (I travel a lot).

Whats the lowest cash equivalent redemption $20 or $25?

arling said:   First post by long time lurker. I've learned a lot from the knowledge shared on this forum - thanks.

Letter I received today says the PenFed Cash Rewards variable APR will be reduced to 9.99% (from 13.99%) effective with the first billing cycle after January 15, 2012. Also, effective February 1, 2012, reward rate for gas purchases stays at 5% but drops from 1% to 0.25% on all non-gas purchases.

In the same letter, they're announcing a new PenFed Platinum Rewards Card (Visa) with 5 points per dollar on gas, 3 points per dollar on supermarket, and 1 point per dollar on all other purchases. Effective February 1, 2012. Points can be redeemed for merchandise, travel, gift cards, or Visa prepaid cards. This includes a limited time offer "...jumpstart your rewards by earning 5,000 points the very first time you use your card and another 20,000 points when you spend $1,000 within the first 3 months. That's $250 that you can use toward merchandise, gift cards, and other rewards. Or, you can use your points for other easy-to-redeem rewards, such as merchandise, gift cards, or travel."

To switch from cash rewards to the new card go to PenFed.org/MoreRewards. "You will receive more information about tracking and redeeming your points once your switch becomes effective in February."

On the PenFed web site, I didn't find any references to the Cash reward changes or references to the new rewards card.
Thanks for the post.

Thanks OP, sounds like an easy $250 in gift cards just for shifting spend to this new PenFed card. The only 'loss' is the instant Cash Back, but since I'm only using this card for gas anyway, it should just be a delay in getting the points rather than instant gratification.

The GC's on the AMEX are kind of limited. It's mostly steakhouses and thingsl ike that. nothing like WalMart. I suspect it to be similar, but perhaps not.

I agree that if these points were merged with the AMEX points, that would be useful.

tjguitar85 said:   The GC's on the AMEX are kind of limited. It's mostly steakhouses and thingsl ike that. nothing like WalMart. I suspect it to be similar, but perhaps not.

I agree that if these points were merged with the AMEX points, that would be useful.


Agree 100% with this. The "Cash Back" options aren't worth it, and aside from Chili's or Olive Garden, you won't find many universal choices. I hate to say it, but Citi and Chase have much better redemption options.

I'm having my doubts that they'll have the same travel deals for those with only a Visa, as with the AMEX you have to go through another portal. The travel deals can be nice, and often cheap compared to using points from a frequent flyer/hotel account.

Bottom line is, this is a degrading of the program unless you like to eat at a couple chain (or expensive steakhouses) restaurants.

Well, one can always keep the cash rewards card, break out another card into this card and get the best of both worlds. That's my initial plan after hearing of this change. I literally don't buy anything on the Penfed Cash rewards card other than gas. It is the horseymen family de facto gas card. Chase Freedom gets everything else with its connection to envaulted.

I got the letter about the program change in the mail today. What a nice Xmas present. I guess the rebate payout may be taking a lot out of their bottom line. I charged over $2K with on the card on my last statement. Guess my business with them may be changing depending on how the other card program is set up.

When I went to the URL site provided in the letter, the information is a rehash of what was stated in the letter. There is no detailed explanation of how the point redemption process works anywhere. So you click on SUBMIT and get changed with only that limited information.

How much corporate buying power/discount you think they get on those gift cards? 25%? more? They'll definitely be making more money (and holding it longer) with this new program.

yeah, the PenFed.org/MoreRewards site did not have https....not feeling good there....

tjguitar85 said:   Bottom line is, this is a degrading of the program unless you like to eat at a couple chain (or expensive steakhouses) restaurants.

I'm not sure why you are thinking it can only be used at restaurants? It says you can use the points towards a Visa prepaid card. That's about as good as cash. As I understand it, the only degration from the current program is that you'll have to redeem and wait for the Visa prepaid cards instead of having it automatically applied to your balance every month.

teammjs said:   tjguitar85 said:   The GC's on the AMEX are kind of limited. It's mostly steakhouses and thingsl ike that. nothing like WalMart. I suspect it to be similar, but perhaps not.

I agree that if these points were merged with the AMEX points, that would be useful.


Agree 100% with this. The "Cash Back" options aren't worth it, and aside from Chili's or Olive Garden, you won't find many universal choices. I hate to say it, but Citi and Chase have much better redemption options.

I'm having my doubts that they'll have the same travel deals for those with only a Visa, as with the AMEX you have to go through another portal. The travel deals can be nice, and often cheap compared to using points from a frequent flyer/hotel account.

Bottom line is, this is a degrading of the program unless you like to eat at a couple chain (or expensive steakhouses) restaurants.


What is not universal about a prepaid visa card? IMO, that is better than most of the other choices on most cards.

My only concern is that if we ignore this, eventually they will require it and not offer the bonus incentive then...

Thantoz said:   tjguitar85 said:   Bottom line is, this is a degrading of the program unless you like to eat at a couple chain (or expensive steakhouses) restaurants.

I'm not sure why you are thinking it can only be used at restaurants? It says you can use the points towards a Visa prepaid card. That's about as good as cash. As I understand it, the only degration from the current program is that you'll have to redeem and wait for the Visa prepaid cards instead of having it automatically applied to your balance every month.


You quoted me, but I didn't say that. The AMEX doesn't allow redemption for prepaid visas. Once we see what the new visa allows redemptions for, we'll have a better idea how useful it is..

Does switching the card means a new credit inquiry?

clutchcargo777 said:   My only concern is that if we ignore this, eventually they will require it and not offer the bonus incentive then...

I agree...i'm hoping they'll post some more info soon.

imbatman said:   So the new card uses points. Combinable with the points earned with the PenFed Travel AMEX? I've got about 28k of those points. If they all combine into one pool of points, that would be handy for me.


Just called PenFed. Points for the Travel AMEX are kept in a separate account as the new VISA Plat Rewards Card. So if you have both cards, you'll have two different PenFed rewards points accounts.

bummer.

Why would bonus for switching be so much more than signup bonus?

Time to apply and switch?

americano said:   Does switching the card means a new credit inquiry?

Anyone figured this out, is it a hard pull for switching?

sabhinav said:   americano said:   Does switching the card means a new credit inquiry?

Anyone figured this out, is it a hard pull for switching?


That is a really good question. I had the Citi Dividend Mastercard and then they basically forced you to upgrade to the NPSL version. Clowns did a hard pull when I made the switch.

I have 2 PenFed VISA cards and have yet to receive a letter as of yet on either card. One just cycled Monday and did not see anything on the statement itself.

clutchcargo777 said:   My only concern is that if we ignore this, eventually they will require it and not offer the bonus incentive then...

QFT

I'm OK with using the cash rewards card exclusively as a gas card. Obviously for those of us who don't carry a balance, the purchase APR has absolutely no effect in our ability to "maximize the financial value" of the card.

I hope PenFed allows us to browse the redemption offerings before they expect us to switch to this card. The letter infers that 25,000 points is $250 in gift cards, which sounds acceptable. Still, nothing really beats the current reward of cash subtracted directly off the amount due. I can only buy so much crap at Staples.

ElJayL said:   I'm OK with using the cash rewards card exclusively as a gas card.

So am I except it complicates the spouse factor. They prefer to only use one card. PenFed was the go to card. Now, they need to carry another card and use that instead. None of my MC or Visa CCs are straight Cash Back any more like this one. Citi, Chase all have minimums in order to cash out. Will need to have spouse use the AMEX Blue Cash preferred for purchases unless some retailer does not take AMEX.

sabhinav said:   americano said:   Does switching the card means a new credit inquiry?

Anyone figured this out, is it a hard pull for switching?

No pull since no application is required. I did it yesterday with no problem, I have a freeze so if there was a pull it would not have gone through. Only thing we are really losing is the instant cash credited on statement which i really don't like because it feels better to get something in my hand. Will just use the points and get visa prepaid gift cards

I think the reason for this is last year Penfed offered certain preferred customers 5% 10 year CDs.

I must admit I purchased 750,000.

soi6 said:   I think the reason for this is last year Penfed offered certain preferred customers 5% 10 year CDs.

I must admit I purchased 750,000.

Got me a couple of them, but i don't think they have anything to do with. I'm sure they hope people go with store gift cards which cost them less than cash

I agree with most. I would still like to keep my cash rewards JUST for gas. I do not carry a balance either so the APR does not affect me. True, 25,000 points = a $250 gift card but gift card to where? Some places like Omaha Steaks ? I dont think so. Will be ok if has Olive Garden or Red Lobster options or what about a plane old prepaid Visa card worth $250 that can be used anywhere ?

My letter just arrived today. Boo. With the demise of the Schwab 2% card, I was just starting to ramp up non-gasoline purchases on this card. Removing the foreign transaction fees a few months ago was a big bonus. Now this severe reward reduction makes the card a lot less useful for non-gasoline purchases.

I'm curious about their business model. The APR reduction is probably a reaction to a low portion of Cash Rewards cardholders carrying balances. Even when paying 1% CashBack, they can still make a lot of money from interchange fees. And remember it used to be 1.25%.

Reducing their general CashBack to 0.25% is a strong incentive to only use the card on gasoline. They probably lose money on each gasoline transaction, although with the fixed portion of the interchange, perhaps it is a wash. (Average gas spending transactions are probably lot less than general merchandise). But bottom line is they are incentivizing their card holders to only use the card for the transactions that cost PenFed the most, which may be a downward spiral to the Cash Rewards card's longevity.

I suspect that there will not a be method to switch from the new card back to the old Cash Rewards card. I also predict that eventually they will not accept new applications for the Cash Rewards card and within a year or two it may disappear altogether, a la the beloved Schwab card.

There is a strong trend away from straight Cash Back towards "points" cards (ex Schwab, ex Chase Perfect Card, and now PenFed). What's next?

If the exchange rate is 1pt = $0.01 even for Visa Prepaid card redemptions, this could be pretty legit. Especially since the highest CB I get for supermarkets is at a paltry 2%.

Thrilla said:   ... Especially since the highest CB I get for supermarkets is at a paltry 2%.

Try applying for an AMEX Blue Cash Preferred card. 6% back on groceries. $75 annual fee but if you spend any decent amount on groceries in a year you will get that back fairly quick. If your grocery sells gift cards you get 6% back on those as well.

mathfaster said:   Thrilla said:   ... Especially since the highest CB I get for supermarkets is at a paltry 2%.

Try applying for an AMEX Blue Cash Preferred card. 6% back on groceries. $75 annual fee but if you spend any decent amount on groceries in a year you will get that back fairly quick. If your grocery sells gift cards you get 6% back on those as well.


even the everyday Blue Cash (no annual fee, 3%) is better. Or HHonors AMEX (6 pts/dollar at grocery) if you like Hilton points.

No hard pull or new account or anything for product change, and yes product change gets the bonus of $250/25,000...1p = 1c and is good for Visa gift card good ANYWHERE.

I would submit that this conversion for those of us charging gas is unequivocally a no brainer. Why? Because of the $250 bonus. Even if redemption options on the Visa Prepaid Card are devalued (say $50 card for 6,000 points, or ~$0.83c/point = 4.15% Cash Back on gas), we can use simple math to find the break-even point determining how much gas we would need to purchase for the loss of reward rate to 4.1% from 5.0% to overtake the $250 incentive.

I am also going to assume that since we must spend $1k, that most of us will use this at a combination of Gas+Grocery merchants, thus not sacrificing any Cash Back on this amount of spending.

$250/(5.0%-4.15%)= $29,411

So if you think that the benefit rates will remain the same long enough for you to charge over $29k in gas, then DON'T convert. If you think you will spend less than $29k on gas, CONVERT.

Personally, I spend about $150-200/mo on gas driving 9k mi/yr. This is only 2k or so per year. So I would need the reward structures to stay the same for 14+ years before I even break even by passing on this conversion.

NOTE: All this math is irrelevant if the rewards points are truly worth 1 cent per point redeeming for the Visa Prepaid cards.

Skipping 609 Messages...
Speaking about pay at the pump and Chase freedom, I filled up at the pump at a Wawa stationin N.J. and did not receive 5% back. Must have been coded as a convenience store rather then a gas station?



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