It’s been a while since we’ve done a weird Wednesday post where we look at a weird or unknown credit card, but I thought it would be good to bring them back for 2016. In this review we’ll look at the Penfed Premium Travel Rewards American Express Card, as always you can suggest cards that we should look at here.
Application Information
To apply for this card, you must be a member of PenFed. The easiest way to qualify is to be a previous or existing member of the military. You can also join National Military Family Association ($15)Â or Voices For Troops ($14). More information about becoming a member of PenFed can be found here. They will also sometimes request pay stubs to verify your income.
What Credit Score Is Required
| Credit Boards | Credit Karma | |
|---|---|---|
| Lowest approved score | 718 | N/A |
| Average approved score | 759.25 | N/A |
Common Reasons For Denial:
- Bankruptcy on file
- Somewhat inquiry sensitive
Occasionally you’ll be approved and then underwriting will manually check your application and then deny you based on that.
What Credit Bureau Does PenFed Pull For The Premium Travel Rewards?
PenFed almost exclusively pulls Equifax for credit card applications, although there has been a few reports of Experian pulls as well.
What Credit Limit Will I Receive?
| Minimum Credit Limit | Highest Reported Credit Limit | Average Credit Limit |
|---|---|---|
| $5,000.00 | $46,000.00 | $17,167.00 |
All recent reports show that the minimum credit limit is now $10,000
Rewards Program
This card earns PenFed premium points.
Earning Rewards
This card earns points at the following rates, with no cap on points earned:
- 5x points on all airfare purchases
- 1x points on all other purchases
It’s also worth keeping in mind that there isn’t a cash advance fee, but you won’t earn points on any of the following:
Cash advances, credit card checks, and balance transfers
Here is what it has to say about what qualifies as 5x for airfare purchases:
You will earn 5 Points per $1 of Net New Purchases you make specifically with airlines. Bundled vacation packages purchased online, with travel agency or any other entity will not qualify for earning points at this level
According to two people in the comments, you’ll also earn 5x points if you book through an online travel agency (Expedia, Orbitz, Amex Travel, Hotwire) if you’re then charged directly by the airline (which makes sense).
Sign Up Bonus
Current Sign Up Bonus
- 20,000 points after $2,500 in purchases within the first three months.
Sign Up Bonus History
As far as I know, this card has always offered the same 20,000 point bonus, although it did use to come with an annual fee and other benefits (e.g Lounge Club membership with $15,000 in spend two free priority passes).If you know of any other offers please let us know in the comments below.
Redeeming Your Rewards
There are three things you can redeem your points for:
- Airfare: Points are worth 0.85¢ per point when redeeming for airfare, if you don’t have enough points to pay for the full flight then you can pay the remaining in cash. There is also a fee of $15 for online bookings and $25 for phone bookings (although there is at least one report of this not being charged)
- Giftcards: These start at 2,940 points for a $25 gift card (0.85¢ per point)
- Merchandise: It’s also possible to redeem points for merchandise, although this basically never provides good value
How Much Are PenFed Points Worth?
Let’s assume you redeem for gift cards, you’ll be getting 0.85¢ per point in giftcards. But gift cards are never worth their face value (it’s not possible to redeem for cash equivalents like Visa gift cards and you could always purchase gift cards with another rewards earning credit card to reduce your costs), so if we assign them a 90% of their face value then points are worth 0.765¢.
If you redeem them for flights then you’ll get the full 0.85¢ per point in airfare.
Our Verdict
Using our valuation above, the sign up bonus is worth ~$153 and the card earns ~3.85% cash back on airfare purchases if you’re redeeming for gift cards. If you redeem for flights then you’ll earn 4.25% back on airfare purchases and the sign up bonus would be worth $170. There are a lot of other cards out there that earn 2-3x transferable points on airfare purchases (although they do come with an annual fee) that people that spent a lot on airfare purchases would probably benefit more from.
If you have a lot of paid flights and don’t want to bother with redeeming airline miles, then this card is probably your best option. Most people will find that the hassle of dealing with airline miles is well worth the effort, as it’s much easier to get over sized value out of miles.
Feel free to share your experiences/thoughts of this card in the comments section below.
