My Evolving PenFed Credit Card Strategy
Doing big things in the points and travel hobby generally means starting with the credit card heavyweights – Amex, Chase, and Citi. But taking things to the next level involves exploring banks and credit unions in the middle tier (and smaller). Over the years, PenFed Credit Union has been very good to me and others. But some not-so-good developments are impacting my PenFed credit card strategy moving forward. Here’s how I’m tweaking.
PenFed Credit Card Developments
A couple PenFed credit card changes, one wider-spread change and a more personal type, have caused me to rethink my strategy with the credit union.
PenFed Is Phasing Out “Free”
For many years, the PenFed Pathfinder card has been a remarkably solid one for individuals not subject to the normal $95 annual fee. The simplest method has been as an Honors Advantage member holding $500 in a checking account. Unfortunately, the Pathfinder’s $95 annual fee will no longer be eligible to be waived, effective 28 Sep.
That makes indefinitely holding onto this card harder to justify. The card comes with such benefits as a $100 in domestic airline ancillary credits, a perk that I’ve found broadly triggers. But the $120 Global Entry/$85 TSA PreCheck benefit is available on a variety of other cards, and the Pathfinder’s Priority Pass doesn’t include free visits – not exactly an attractive lounge perk. Paying $95 to earn up to 4x on travel and 3x on dining isn’t anything special since points are worth only about 0.85 cents per point for cash equivalents.
PenFed Might Close My Power Cash
Several weeks ago, I received an email stating that my PenFed Power Cash Visa is subject to closure due to lack of activity. I’ve historically used this card to earn 2% cash back everywhere as an Honors Advantage member. But I’m not surprised I received this email, considering I haven’t used this card in quite a long time. Over the years, I’ve preferred to hold as many 2% cash back cards as possible; I’d rather have plenty around for when I need them for unpredictable, time-sensitive opportunities.
But I haven’t had a need for the PenFed version recently. Despite this closure threat, I inexplicably still haven’t gotten around to using the card again to keep it active. That’s how little I’m thinking about this card right now.
My To Do List
First…
I’ll take care of the easiest task first. I need to take a few seconds to make a simple purchase ASAP with my Power Cash card to keep the account active. We’ll probably do the same with my wife’s Power Cash account while we’re at it. We haven’t received any email on her account, but perhaps it’s best we get out in front of it.
Next…
My wife and I will each apply for new Pathfinder cards ASAP, also. We each hold multiple Pathfinder card accounts. Individuals can also receive the cardmember signup bonus multiple times, which still sits at 50k points on $3k spend in the first 90 days. By applying and hopefully being approved sooner rather than later, perhaps we can each avoid the annual fee one more time. I conservatively imagine this means we’d need the first statement to cut on each of these new cards before 28 Sep to avoid the annual fee. But worst case if there’s a hiccup or an unforeseen delay, we’re ultimately okay absorbing that annual fee as part of the signup bonus.
Then…
We won’t be as loyal to each of our current card accounts anymore, flanking to a more transactional approach. We each plan to close our current Pathfinder cards when the $95 annual fees come due. I’m suspecting this will have another advantage, as well.
We’ve had great overall success with PenFed, but like many issuers, there’s a maximum amount of credit they will provide. The credit union has often declined applications when members hit that ceiling. By holding a bit leaner profile with PenFed, hopefully I can continue avoiding that. This is key because a higher-turnover approach with PenFed is more rewarding now given the Pathfinder’s universal $95 annual fee. With repeatable signup bonuses and a soon-to-be-unavoidable annual fee, sitting on a Pathfinder account long term is an increasingly losing proposition.
Maybe…
If PenFed Pathfinder approvals dry up, I may consider closing a Power Cash. Hopefully, freeing up some of that credit line could help with a subsequent approval. But we’re not there yet.
Conclusion
Like many other banks and credit unions, the game isn’t over with PenFed. It’s just changing, and I accept the challenge. Plus, PenFed is tweaking things a bit in another way, too. Even if ongoing benefits aren’t outstanding, I’m interested to see if/how welcome offers change.
What’s your relationship like with PenFed these days?
