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PenFed Visa: Best 5% Cash Back Rewards on Gas Credit Card

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Pentagon Federal Credit UnionYears ago, when both credit and champagne flowed freely down Wall Street, the fabled 5% cash back reward credit card freely frolicked among elm and oak trees of Central Park. Nowadays, finding a decent 5% cash back reward credit card is rarer than seeing a unicorn… but today I saw one. His name was PenFed.

PenFed is short for The Pentagon Federal Credit Union, a credit union for the branches of the military and government, and has been a popular credit union for personal finance enthusiasts. A few years ago, you could get some pretty high interest rates on their certificates of deposit. Today, the interest rates are more pedestrian but I bet they’ll be more attractive in the future.

However, the real claim to fame, at least today, is their 5% cash back on gasoline credit card.

5% Cashback on Gasoline

While normally known for its great interest rates on deposit products (savings, CDs), offers a PenFed Visa Platinum Card that gives you 5% cash back on gas purchases paid at the pump. The PenFed Visa Platinum card is pretty lights out when you compare it to its competitors. You get 1% on everything else.

If that wasn’t enough, there are no limits to the rewards and the cash back is credited to your card each month. No points, no games, just straight up cash credited to your statement. That’s ideal.

Eligibility

Like any credit union, it’s only as good as your ability to join. To be eligible, you had to be connected to the military in some way – either active or retired, related to someone who is, worked at a military installation, a government employee, or employee/volunteer with the American Red Cross (here’s the full eligibility list).

Fortunately, if none of those apply, you can join the National Military Family Association and be eligible for an account through your affiliation with them. A single year annual membership costs $20, and eligibility to PenFed, and you can decline to renew the following year.

Deposit Products

Right now, the deposit products (checking, savings, CDs) aren’t all that spectacular. They used to be leaders in certificate of deposit rates but the shorter term rates just aren’t that appealing. A 12-month CD for 1.25% APY puts it near the back of the best CD rates, though rates get a little better the longer you stretch the maturity. Their savings account yields 0.35% APY, again not very appealing.

If you do open an account, be aware of the various minimum account balances and service fees PenFed charges for deposit accounts.

If I didn’t buy the vast majority of my gasoline from Costco, which only accepts American Express credit cards, I’d be all over this. I still might join in the near future just to get access to their CDs, which I anticipate will become more attractive whenever the Fed begins raising interest rates again.

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37 Responses to “PenFed Visa: Best 5% Cash Back Rewards on Gas Credit Card”

  1. Chris says:

    I have had this card for over a year now and love it. Penfed has been a great FI. I run most of my monthly expenses through this card and use the account to create extra savings paying the balance off in full. If you are a Upromise account holder, use this card to buy gas at a participating Upromise station and get an extra 1% savings for college!

  2. aua868s says:

    How i wish i could meet their eligibility…nonetheless, I have the awesome Schwab credit card with 2% back on everything….way to go Schwab!

  3. zapeta says:

    This is a great alternative to the Schwab card since I don’t think its available anymore.

    • aua868s says:

      Nope…I just got it a week ago…so Schwab card is still alive and kicking!

      • zapeta says:

        Oh, good to know. I didn’t see the offer on their website so I wasn’t sure if it was still active.

        • govenar says:

          Supposedly Schwab has stopped advertising their 2% credit card but it’s still possible to apply for it. It’s possible that they’ll eventually close it to new people though (but it’s likely that existing cardholders will still be able to use their cards).

  4. Seth @ Boy Meets Food says:

    I wonder how common that set of rebates is with cash back cards. Mine (also through a credit union) is the same, minus the 2% back at supermarkets, but it still has the 5% on gas, and 1.25% on everything else. The other thing that I LOVE about it… I don’t know if the PenFed does this, but mine directly applies the credit to my bill each month. Since the credit union is a local one, I guess my suggestion is to check out all of your local credit unions to see what they offer. Credit unions really can be a great way to go.

  5. Seth @ Boy Meets Food says:

    Sorry, I just realized that I missed where you did write the PenFed card does apply it to the bill… oops.

  6. Infinion says:

    @aua868s, et al.

    Everyone meets their eligibility. If it comes down to it, you can just join the NMFA as the article states. The $20 you spend doing that will be paid for in the first month with your rewards.

    By far the best part of this card, is that the rewards are applied directly as a credit to you bill at the end of the billing cycle.

    BTW, historically, in addition to great CD rates, Penfed also usually has great mortgage and auto loan rates and they do honest business. They are tight on security and creditworthiness. Those with low credit scores beware, don’t bother trying to get the card. However, once you’re in the door, they’ll pretty much extend whatever credit you ask for. Take this card for example, on the credit app, it’s name your own limit up to 50K.

    • aua868s says:

      Thanks for the info…defintely worth looking into it, at least the cd from my perspective.

  7. Savings CD rates are going down. The 5% back on purchases is the best deal ever.

    John DeFlumeri Jr

  8. Joe says:

    I wanted to point out that the 1.25% is changing to 1% early next year. From their T&C:

    “Effective, February 1, 2010 all other net purchases receive 1% including fuel purchases for airplanes and boats.”

    I have this card and one of the best things about this card is the rewards are posted to your account at the end of each month (immediately reducing the amount you owe).

  9. saladdin says:

    The 1.25% rate on all other purchases is going down to 1% while the other rates are staying the same. Look for the terms in your mailbox/email. It may even be posted on their site.

    saladdin

    • saladdin says:

      Yep. It’s posted. 5% fuel not effected.

      saladdin

      PenFed reserves the right to modify these programs at any time. Effective, February 1, 2010 all other net purchases receive 1% including fuel purchases for airplanes and boats.

      • aua868s says:

        glad that i have my Schwab card!

      • Jim says:

        Hmmm… I read that on Fatwallet and put it in the original post but it seems as though WordPress decided to publish the wrong version. Grrr… either way, I still think the 5% on gas is a pretty solid deal.

  10. Mrs. Money says:

    Awesome! I get 4% back on gas right now with my credit card. :)

  11. Izalot says:

    I like Chase’s 3% on groceries, pharmacy and gas better then 5% on just gas and 1% on everything else. The cost of entry to this card just doesn’t cut it for me.

    • Scott says:

      What Chase card is that? Are you sure you’re not being phased out to a “vanilla” 1% rewards Chase card soon? Chase has been cutting back gradually all year on their cardholders, especially the Chase Freedom cardholders.

      • govenar says:

        Chase Freedom Plus seems to be immune from the changes to 1% so far. It has an annual fee, but if you spend a lot in the 3% categories it’s still worthwhile.

    • saladdin says:

      This just shows how everyone’s spending habits are different. I made my $20 membership fee back the first month with Penfed. I drive 100 miles round trip a day. Gas is way more of an expense for me.

      saladdin

      • Infinion says:

        Exactly my thoughts. There’s very little cost of entry. It’s not like it has an annual fee or anything. Even though Penfed is reducing the ‘everything’ reward to 1%, that’s the first change to the card in a long while now. Credit Unions are much better than big banks with that sort of thing. They aren’t running a bait and switch, it’s the real deal. Besides, with joining the NMFA, you get some other benefits anyway if you choose to pay any attention to that.

      • aua868s says:

        I have driven 6,500 miles in the last 2.5 years in my car….one of the main reasons why this card does not help my situation much…well said saladdin, benefits of cards reach different people in different depths!

  12. Diasdiem says:

    I’m not a member of the military, but apparently I didn’t have to join the NMFA because I’m already a member of USAA through legacy. I only partly filled out an online application, didn’t go all the way with paying for a NMFA membership, but the other day I got a confirmation letter from PenFed for my membership to the CU. Even if they’re scaling it back to 1% on non-gas-and-grocery purchases, that still beats my USAA cards that have tier rewards that top out at 1.25% after about $17,000 of purchases.

    I was originally going to get a Chase Freedom card for that reason, but the PenFed card seems to have better all-around benefits. The only thing it seems to be lacking when compared to others is an online shopping portal that get you additional rewards.

  13. Chris says:

    Another good point. I beleive that they count any Super WalMart purchase as a grocery purchase.

  14. JC says:

    i am surprised no one has mentioned AMEX Blue Cash which also offers 5% back on gas, groceries, and drugstores and 1.25% on everything else. Caveat: it doesn’t kick in until you have spent $6500 on your card (much lower rates up to that point). but if you are a big-spender, it’s the way to go. also, the cash only gets credited yearly though.

    • saladdin says:

      That’s a big issue. Why screw around with tiers?
      If you’re a big spender you would already be hitting those rewards from day 1 with Penfed.

      saladdin

  15. aua868s says:

    general question? why more cashback on gas than any other item? that trend seems to exist in many cards….more cash back on gas than other purchases.. any thoughts?

    • govenar says:

      Maybe to compete with gas companies’ own credit cards that give a high cashback. Most other categories don’t have companies offering their own cashback credit cards.

  16. eric says:

    If I didn’t have the grandfathered Amex Simplycash 5% cash back on gas card, I would’ve applied for this already. I met PenFed eligibility through another way (it was free).

  17. Melanie Groover says:

    I can’t find the page to log on to my account

  18. Liam says:

    I have a question about the redemption, does they have a minimum limit like you need $50 accumulated before they will credit you?

    Liam M.

  19. J says:

    Absolutely no minimum or increments. And it credits when the statement prints, not towards the next billing cycle like most cards.

    My last credit was 61.97. Not chump change.


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