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) 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.
Be very careful with this card. I have had it for over 6 years. They devalued their points without notice. And although the value given here for the airfare redemption is close, take into consideration that these are point redemptions and the terms of the rewards provider say they may not refund your points if you cancel or change your air travel reservations. The do promise a $35 fee for modifying a booking in addition to any fees from the airline. I know the law says airlines must give you 24 hours to change your mind for a cash/credit purchase, but I would be cautious redeeming “points” for airfare. I don’t know how the law would look at that and you don’t really want to be the test case. I would avoid this card. I regret getting it.
Thanks for the info.
I am a PenFed member, though have no liquidity with them. My score is fine; my inquiries out the roof.
Wonder how much Amex positioning is enough to be considered. I am a good Amex customer. Looking to phase out my BOA TR spending as BOA is getting so much harder to work with.
Is there an exp date on this offer?
No exp date, this is the standard offer I believe. This card just runs on the American Express payment network, so they won’t really have any influence.
I was lucky to get approved for the Penfed Cash Rewards card, 5% back on all gas purchases. Can’t beat that in my opinion. I only use it for gas. Great card
One of PenFed’s other cards is worth looking at:
https://penfed.org/platinum-cash-rewards-card/
3% or 5% cash back on gas purchases. To get 5% you need to have a banking relationship with them. They periodically have CD’s with great rates. However, not at the moment.
I use it for all gas purchases. One nice thing is that it deducts the 5% off each billing cycle. You need not reach a particular threshold or do anything active to get the reward.
We’ve reviewed this product before: https://www.doctorofcredit.com/penfed-platinum-100-bonus-55x-on-gas-purchases3xon-groceries/
the airfare rate is the same as gift card rate, 0.85 cents per point. Also, I just redeemed a point for a flight and was not charged a $15 fee.
A nice thing about these points is that you can redeem however many points you want towards your flight.
For example, I had a flight that cost $346 or 40730 points. But I only had 36639 points. So I paid my points and charged $34 to my non-Penfed credit card.
Another nice thing is that you get the 5x if you book through a travel agency (Expedia, Orbitz, Amex Travel) but get charged directly by the airline.
Truth be told, this card isn’t worth it if you’re a churner. There are much better cards to book airfare with, including Amex PRG, Citi premier, Citi prestige etc. But if you want a no AF card to book flights and no hassle redemption, it’s actually pretty great!
This card also earns 5x penfed points on OTA (Orbitz, Hotwire, Expedia), though I haven’t used it enough to see if there are any restrictions. The best gift card redemption option is Amazon, and you can redeem with a combination of points and cash.
Basically, this is a good card for someone who books a lot of travel, doesn’t want to pay an annual fee, wants another card for Amex Offers, and doesn’t mind redeeming points for Amazon gift cards.
Added this to the post, thanks!
Kind of a pointless review IMO without being able to tell us the value that we can redeem towards airfare, that’s one of the most important pieces of information for calculating the value proposition of the card…
And something which I had no access to without opening the card, there were old data points that I knew were inaccurate and PenFed didn’t reply to my requests for comment. I knew a reader would have the information and they did (see below!) will update the post now.