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PenFed reduces reward rates on Platinum CashBack Rewards

Feb. 27, 2010
Credit Cards
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Still one of the best rewards cards.

Despite dropping the base rewards rate from 1.25% to 1.00% this week, the Pentagon Federal Union – PenFed Cashback Rewards card remains one of the best cash rewards cards out there for people with excellent credit.

5% on gas, Visa network acceptance, no annual fee.

What makes the card so unusual is the 5% cash back on gas and 2% at supermarkets, and that it is a Visa, which makes the generous rewards program even more surprising (banks issuing Visa and MasterCard network cards charge merchants lower fees than Discover and American Express, usually resulting in less generous rewards). Also, the card has $0 annual fee.

To put things into perspective, the best gas rewards cards offered by Lukoil/Getty only offer 4% at their gas stations. Furthermore the Blue Cash card requires you to spend a total of $6,500 per year before achieving a 5% cash back rate on gas, though with the 1.25% rewards rate after $6,500 you could end up better off if you spend a lot each year.

Joining PenFed.

The only catch is that you have to join the PenFed credit union. This is easy if you are affiliated with the military, Red Cross, or one of many other organizations. However, anyone can join the credit union by donating $20 to NMFA or volunteering for the Red Cross.