PenFed Power Cash Rewards Review: Up to 2% Unlimited Cash Back

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Are you looking for the steady returns of an everyday cash back credit card? PenFed Credit Union has an option you may want to consider.

The PenFed Power Cash Rewards Visa Signature® Card is a no-annual-fee credit card that awards users up to 2% cash back on purchases. The standard cash back rate is an unlimited 1.5%, but select PenFed members can increase their earnings to 2%.

Money expert Clark Howard is a strong proponent of cash back cards thanks to the simplicity and straightforwardness of the rewards programs.  He carries both the Citi Double Cash and Navy Federal cashRewards cards in his wallet.

When compared with those cash back cards, does PenFed’s offering make sense for your wallet?

Team Clark’s review of this card is aimed at helping you make your choice between PenFed and some of its toughest competitors.


Table of Contents

Team Clark has spent time evaluating the credit card market in several categories including the best cash back credit cards. We’ve compared the PenFed Power Cash Rewards to the best cards in this segment of the market. And we’ve determined that it’s a viable choice — thanks to its easy-to-understand cash back program and lack of an annual fee.

As you’re deciding whether this card is a fit for you, please use this review in conjunction with Clark Howard’s 7 Rules for Using Credit Cards.


What Is the PenFed Power Cash Rewards Card?

The PenFed Power Cash Rewards Card is a no-annual-fee credit card that touts an unlimited cash back program that pays out based on your status with the credit union. The guaranteed cash back rate is 1.5% on all purchases with the option to earn as much as 2%. More on that process to come.

This card is offered by PenFed Credit Union, which is actually a shortened name for Pentagon Federal Credit Union. Established in 1935, PenFed serves more than two million customers in all 50 U.S. states.

To apply for the Power Cash Rewards Card, you must first be a member of the credit union.

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How to Become a PenFed Credit Union Member

There are several ways you can qualify to become a PenFed credit union member. Here are some of the most popular, per the credit union’s membership application:

  • Be an employee of the United States government
  • Have status as an active, retired or honorably discharged members of the U.S. military
  • Live or work in a qualifying city (e.g., Fort Hood, Texas or Fort Gordon, Georgia)
  • Belong to a qualifying association or organization (e.g., American Red Cross or Civil Affairs Association)
  • Have a family member who qualifies through one of the above ways

Even if you don’t meet any of those criteria, PenFed still allows you to apply and will work with you on a way to get qualified.

Contrary to how most credit card applications work, PenFed requires that you apply for a membership for a savings account before you can apply for the credit card.

PenFed membership is required to apply for this credit card.
PenFed.org

PenFed Power Cash Rewards: Specs and Perks

Let’s take a look at the fine print to examine some of the card’s perks and drawbacks:

Cash Back Rewards

You’ll earn either 1.5% or 2% cash back on all of your purchases with this card. There is no spending cap for these rewards, and you won’t be subject to any category restrictions.

The cash back rate depends on whether you’re a member of the PenFed Honors Advantage program. You get 1.5% without it and 2% with it.

How to Become a PenFed Honors Advantage Member

So, if you’re like me, you want that 2% cash back if you’re going to be in at all for this credit card.

Here’s the scoop: There are two different ways to qualify for the PenFed Honors Advantage membership that you need to get the cash back boost.

  1. Military Service: If the primary applicant for the credit card is active duty, reserve, retired or honorably discharged from any branch of the military, they’ll automatically receive the cash back boost.
  2. Checking Account: You can avoid the military requirement if you maintain a PenFed Access America Checking Account. You can open a new account when applying for the credit card or use an existing account. This checking account is free if you keep a daily balance or direct deposit amount of $500.

More Cardholder Benefits

  • Welcome Bonus Offer: PenFed is offering a $100 welcome bonus if you spend at least $1,500 with the credit card within the first 90 days of card membership. This is a nice gesture but well below some of the welcome bonuses offered on competing no annual fee cards.
  • Introductory APR Period: You get 12 months of 0% APR on balance transfers to this card. These transfers are subject to a 3% fee. There is no introductory APR for new purchases.
  • Membership Discounts: Since you’ll be joining the credit union as a qualifying event for your credit card, you’ll get access to all the membership perks. Those include discounts at places such as Travelers Insurance, Alamo Rental Car, TurboTax, SimpliSafe and more.
  • Visa Signature Offers: In addition to your membership discounts through the credit union, you’ll receive more offers through the card’s Visa Signature affiliation. This includes discounts on brands including Tommy Hilfiger, New Balance and GNC.

Cardholder Fees

Here’s a quick look at some of the fees for the PenFed Power Cash Rewards Card:

  • Annual Fee: None.
  • Balance Transfer Fee: 3% of total amount transferred.
  • Cash Advance Fee: None, but interest charges start the day you take the money.
  • Foreign Transaction Fee: None.
  • Late Payment Fee: These are tiered. You’ll owe up to $20 if the balance is less than $1000; up to $25 if balance is $1000-$2000; up to $28 if balance is greater than $2000.

PenFed Power Cash Rewards vs. Navy Federal cashRewards

If you are a U.S. military or government employee (or a qualifying family member), you’ve likely considered the benefits of Navy Federal Credit Union. In fact, you may be a member of both of these military-friendly credit unions.

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When it comes to cash back credit cards, both try to woo you with rewards and perks that are competitive with most cash back cards on the market.

The PenFed Power Cash Rewards and the Navy Federal cashRewards both offer a flat 1.5% cash back rate with opportunities to increase to 2% cash back. In the summer of 2020, Clark Howard added the Navy Federal card to his wallet thanks to a promotion (which is no longer active) that secured him 2% cash back on all of his purchases.

Card Comparison

If you’re trying to decide between these two cards, Team Clark has put together a comprehensive comparison to help you make your choice:

Card PerkPenFed Power Cash RewardsNavy Federal cashRewards
Annual FeeNoneNone
Standard Cash Back BonusUnlimited 1.5%Unlimited 1.5%
Cash Back Boost OfferUnlimited 2% for military members and checking account holdersNone at this time, though there have been promotional offers in the past
Welcome Bonus Offer$100 on $1,500 spending in first 90 days$200 on $2,000 spending in first 90 days
Introductory 0% APR on New PurchasesNone6 months
Introductory 0% APR on Balance Transfers12 monthsNone
Balance Transfer Fee3% of total amount transferredNo fee
Foreign Transaction FeesNoneNone
Cell Phone ProtectionNoneYes, if you pay your wireless bill with the card

As you can see, while these cards are comparable in many areas, there are a few options that may move your decision one way or another.

The Navy Federal card has a slightly better welcome bonus, a window for 0% APR purchases, cell phone protection and no balance transfer fee. But the PenFed card touts an active route to 2% cash back and a year of 0% APR on balance transfers.

If any of those differences tilt the scale in your financial life, that may guide your decision making process on these similar cards.

In addition to these credit union cash back cards, you may also want to consider the Citi Double Cash or PayPal Cashback Mastercard. Both of these cards offer a straightforward 2% cash back on all purchases and do not require a membership in anything else to apply.


Final Thoughts

Are you considering adding the PenFed Power Cash Rewards to your wallet? Let’s review some of the major pros and cons of the card before you make your final decision:

PenFed Power Cash Rewards: Pros and Cons

Pros Cons
PenFed Honors Advantage members earn 2% cash back Welcome bonus is only $100 and somewhat difficult to achieve
No spending caps or cash back categories Must join the credit union to apply for the card
0% intro APR for 12 months on balance transfers Need the Honors Advantage program to enjoy top cash back rate

Bottom Line: If you’re already a member of PenFed Credit Union or are looking for a good credit union membership, this could be a good cash back credit card for your wallet.

To get the most out of it, you’re going to need to be a PenFed Honors Advantage member so that you’re eligible to claim the full 2% cash back. That rate of return on everyday purchases is among the best in the no annual fee credit card category.

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However, for many consumers, it may be simpler to apply for a card like the Citi Double Cash or PayPal Cashback Mastercard. These cards award 2% cash back on all purchases without any membership requirements or special hoops to jump through.

No matter how you land there, money expert Clark Howard recommends the 2% everyday cash back earnings for your day-to-day purchases so that you know exactly what you’re getting from your credit card rewards each month.

Do you have experience with the PenFed Power Cash Rewards Credit Card? Let us know how you like it in the comments below!

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