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PenFed, a credit union that anyone can join (more on that later) has just introduced a new cash back rewards credit card, PenFed Power Cash Rewards Visa Signature® Card. The card pays a high, flat cash back rate and brings a credit union approach to fees (low and not many of them) and simplicity. Here are the details on the cash back that you can earn:
- Anyone with military service earns 2% cash back through their PenFed HonorsAdvantage on all spending, with no limits or restrictions. That is the highest flat cash back rate in the market.
- Anyone with a PenFed Access America Checking account (restrictions apply) earns 2% cash back on all spending, with no limits or restrictions. (If you keep $500 in the checking account, there is no fee and you earn 0.20% APY on the money).
- If you do not have military service or a checking account, you can earn 1.5% unlimited cash back. At 1.5%, the card matches Capital One® Quicksilver® Cash Rewards Credit Card, but it is still beat by Citi® Double Cash Card – 18 month BT offer.
- There is a minimum redemption amount of $5 for the cash back that you have earned.
- There is a bonus offer: get $100 Statement Credit when you spend $1,500 in the first 90 days.
In addition to the cash back, here are some additional features:
- Chip with pin functionality: if you travel overseas, you might find chip + signature limiting. For example, trying to use a card with only signature functionality at kiosks across Europe (like the London Underground) can be challenging.
- No annual fee and no foreign transaction fee.
- APR range of 11.74% - 17.99% Variable. If you have excellent credit, the APR at Citi (on the Citi® Double Cash Card – 18 month BT offer) is 15.49% - 25.49% (Variable). For people who revolve occasionally, this could be a better option. (Although our advice remains to pay your balance in full and on time. If you need to borrow money, personal loans and balance transfers remain cheaper options).
Best Cash Back Credit Card for Military: 2% is the gold standard for a flat rate cash back credit card, and PenFed delivers for men and women who have served. This is better than any competing flat-rate cash back credit cards because of the lower APR and lack of foreign transaction fees.
Best Cash Back Credit Card for Spending Abroad: If you use Citi® Double Cash Card – 18 month BT offer, you would be hit with a foreign transaction fee of 3%. So, you would earn 2% but be forced to pay 3% in fees. Before this card, Capital One® Quicksilver® Cash Rewards Credit Card was our top choice because of a 1.5% Cash Back on every purchase, every day and no foreign transaction fees. PenFed’s PenFed Power Cash Rewards Visa Signature® Card now wins because (a) if you put $500 into a PenFed Access American Checking account you can earn 2% on this card, and (b) the card offers chip and pin functionality. If you spend $1,000 overseas this year, you would pay $10 to Citi, (2% cash back – 3% fees = -1%), would earn $15 with Capital One and would earn $20 with PenFed.
Tie: Best Flat-Rate Cash Back Credit Card: With both Citi® Double Cash Card – 18 month BT offer and PenFed you can earn up to 2%. Each card has its own unique differences, which is why they are tied for best flat-rate card in the market.
- PenFed: You need to join the credit union, open a checking account and fund the account with $500 (or sign up for direct deposit) to ensure you get the full 2% and avoid fees. Financially it will make sense, but there are a number of obstacles to get the full rewards (unless you are military).
- Citi® Double Cash Card – 18 month BT offer: It is easy to apply and get the card (no credit union membership or Citi checking account required). Earn 2% cash back on purchases: 1% when you buy plus 1% as you pay..
There are still options to earn higher cash back rates in certain categories. You can find the best cash back credit cards by every category listed on our site. For example, with the Fort Knox Federal Credit Union Visa® Platinum Card, you can Unlimited 5% cash back on gas and 1% cash back on all retail purchases.
If you want to learn more or apply, you can visit PenFed’s website.
Requirements To Earn 2%
Here are the details on how to ensure you get the full 2% earn rate:
Military: You are eligible to earn 2% if the primary or joint applicant is in military service, the National Guard, the Reserves, an honorary discharged veteran or retired from the United States military. Military members receive the 2% upon completion of the application – no further action is required.
Checking Account: If you do not meet the military requirements, you would need to open a checking account with PenFed. The account is called the “AccessAmerica Checking Account.” There are some decent benefits to the account (you can earn 0.20% APY interest on balances up to $20,000 and 0.50% APY on balances between $20,000 and $50,000). If you shift your monthly direct deposit of at least $500 to this account, you will not have a monthly fee. However, if you do not want to shift your direct deposit, you can deposit $500 and keep it there to meet the required minimum balance. This is actually the easiest way to earn the 2%, cash back rate and, given the 0.20% interest on the checking account, it can be financially worthwhile.
Join the Credit Union: There are multiple ways to join the credit union. If you are active or retired military, you are eligible to join for free. If you work for the US government or are a relative of a member, you can also join for free. But don’t worry if you are unable to meet those requirements. You might belong to an eligible organization (check here). You can also join an organization to become eligible for credit union membership. You can pay $17.00 (one time and non-refundable) to join Voices for America’s Troops or the National Military Family Association. By supporting a good cause, you become eligible for credit union membership. In addition to the credit card, PenFed is known for low rates on auto loans and mortgages.
The information related to Citi® Double Cash Card – 18 month BT offer has been independently collected by MagnifyMoney and has not been reviewed or provided by the issuer of this card prior to publication.