Posted on January - 09 - 2012
NEW: PenFed Platinum Rewards Card Offers $250 Signup Bonus
Mark your calendars! Starting in February, Pentagon Federal Credit Union is rolling out their new Platinum Rewards Card, which offers 5% back on gas purchases, 3% back on supermarket purchases, and 1% back for all other purchases. With perks like this and no annual fee, the new PenFed is on par with the best rewards credit cards in the business.
However, the Platinum Rewards Card comes with a signup bonus that unquestionably has both cards beat: $250. You’ll earn 5,000 points the first time you use the card and another 20,000 points when you spend $1,000 in the first 3 months. The Chase Freedom is currently offering a $200 bonus, and AmEx Blue Cash Preferred is offering a $100 bonus.
PenFed Visa Platinum vs. Platinum Rewards
The new Platinum Rewards Card is the latest version of PenFed’s current rewards card, the Visa Platinum. If you already have a Platinum Card, you can upgrade to the Platinum Rewards Card for free, or apply for it separately. You’ll qualify for the $250 signup bonus regardless of whether or not you already have a PenFed credit card. Here’s the question: if you already have a PenFed rewards card, is it worth upgrading? We did some digging and realized the answer’s a bit more complicated than you might think.
In many ways, the old Platinum Visa Card is pretty similar to the Platinum Rewards Card. It gives you 5% back on gas and 1% back on all other purchases. The APR is lower than many comparable rewards cards on the market at 13.99%. Starting January 15th, the APR will be reduced to 9.99%, which is excellent, but the base rewards rate drops from 1% to 0.25% back. That reason alone seems like a great incentive to upgrade to the new Platinum Rewards Card, which will also have a 9.99% APR and better rewards. However, the Platinum Visa has more flexible rewards options, which might make it worth keeping if you already have it.
Points versus cash
The Platinum Visa gives you rewards in the form of an automatic monthly statement credit. There are no categories to sign up for or points to redeem. The PenFed Platinum Rewards, by contrast, earns points, not cash, and only lets you redeem them for merchandise, travel, gift cards and Visa prepaid cards. We have to admit we’re skeptical about the prepaid card. Why would you want to redeem your credit card points to get another card that probably has extra fees and doesn’t earn rewards?
PenFed won’t charge you any fees to use a prepaid card, but unfortunately we can’t get the same promise from Visa. To get the maximum point value, it looks like your best bet is redeeming points for gift cards or travel expenses, but you’ll probably want to wait and see if you like what’s being offered. PenFed’s points redemption website is scheduled to go up on February 11, 2012. Here’s what we know now: there will be nearly 100 gift cards from well-known retailers and 1,000 brand-name merchandise items for cardholders to choose from.
Joining PenFed: the benefits of a credit union
Since PenFed is a credit union, you’ll need to become a member before you can apply for a credit card. Although it’s a credit union for military and government employees, anyone can join with a one-time, tax-deductible donation to a qualifying charity. Give $20 to the National Military Family Association or $15 to Voices for America’s Troops, and you’ll be a member for life. There are many benefits to joining a credit union, credit cards aside. Chances are, you’ll get better yields on your accounts and be subject to fewer fees. Check out NerdWallet’s rates tool to get an idea of how much you can earn with a credit union savings account.
The Chase Freedom offers 5% cash back on rotating bonus categories, 1% elsewhere and comes with $200 cash back signup bonus and no annual fee. Its one of our most popular cards overall, and definitely one of our best no-fee cards.
The American Express Blue Cash Preferred gives 6% cash back on groceries, 3% on gas and department stores, 1% elsewhere. It also offers a $100 signup bonus and has a $75 annual fee. We like it because a) who gives 6% rewards on anything, let alone a category that we spend so much money on, and b) you can buy gift cards to Starbucks, Macys, etc. at grocery stores, thus earning 6% on a wide range of your purchases.
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