New PenFed Rewards Program

[milechazzer]

I received this letter today (copy attached below) about "important changes" to the PenFed Platinum Cash Rewards Visa program.  First off, they're reducing the cashback rate on all purchases (other than gas) from 1% to 0.25%. 

Now it hasn't been that long since they eliminated the 2% cashback rate on supermarkets. And given the direction that this card has been going in, I'm guessing it won't be too long before the 5% cashback gets reduced to 4% or 3%.

But then the letter talks about their new rewards program, and seems to offer cardholders the choice of remaining on the existing cashback program, or switching to a rewards program. In the new rewards program, you'll earn 5 points for gas purchases and 3 points for supermarket purchases.  The letter says rewards points are redeemable for gift cards and Visa prepaid cards (sounds good) but it doesn't say anything about the rate of redemption. I went to the website that the letter directs you to, and gives you the option to switch your account over to the new program, but doesn't provide any further details.

If they're really offering prepaid Visa cards at a penny per point, then this sounds like it may be worthwhile (at least when Supermarkets are not in season on the Chase Freedom Card), since they're offering 3% in rewards points on Supermarket purchases.  In addition, they're offering a 25,000 point bonus for doing the upgrade and spending $1k in three months.

Any thoughts?

[Dan]

Dumb.  By lowering other purchases to .25% to subsidize the gas rebate they will just encourage people to only use this card for the gas purchases, which will wind up costing them even more.

The 5% gas will be gone soon enough, as I said it would earlier this year.

And I'm sure the points program is a scam judging that they don't even show you the points catalog on the points program site.

[milechazzer]

I sent them an email requesting information about the rewards. But the letter actually says that 25k points are enough for a gift card worth $250. I'm guessing that they're offering the gift cards at a penny/point, but the prepaid Visa cards will cost more.

While it's obviously just a matter of time before wipe out any value in this card, as long as they're giving me 5% cashback on gas all year round, without an annual fee, I'm still a fan. The only questions is whether to try to hang on to the old program, or to switch to the new program for 3 points on supermarkets and 25k bonus points.

I'll post more info when I hear back from them....

[Dan]

"The GC's on the (Penfed) AMEX are kind of limited. It's mostly steakhouses and thingsl ike that. nothing like WalMart. I suspect it to be similar, but perhaps not."

[3ZeroT]

On another forum people have reported speaking to Penfed customer service, who say this will be different than the the Penfed AMEX program - there will be a wider variety of gift card options (Walmart even mentioned), and at least 1 CSR said the prepaids will be 1 penny per point.  So while that is not necessarily reliable information it does sound more promising.

[gogreen]

I'm  big fan of the PenFed card so I'll try to stick up for them. Here's the FAQ they've added

Switching Rewards - FAQ
   

Q. Do I have to switch to the PenFed Platinum Rewards Card?

R. No, the choice is entirely up to you. We are just providing you with the option to switch, if you are interested.

Q. The value of cash back is easier to understand than the value of points. What would my points be worth in the PenFed Platinum Rewards program?

R. A lot of point rewards programs are tricky but PenFed designed the PenFed Platinum Rewards card to be very simple. Each point you earn is worth $.01 (a cent) in terms of value. For example, 5,000 points would be equal to $50, which you can put on a gift card of your choice, including a pre-paid Visa® card that can be used like cash anywhere Visa is accepted, or use towards brand-named merchandise or travel rewards.

Q. How will I be able to redeem my points?

R. You will easily be able to track and redeem your points online or via phone.

Q. Is the PenFed Platinum Rewards Card better for me than my PenFed Platinum Cash Card?

R. Yes, in terms of the ability to earn rewards. The PenFed Platinum Rewards Card not only offers bonus points for gas but it also offers bonus points for supermarket purchases and a point for all other purchases. Remember, the points are worth $.01 so it is like receiving 1% "cash back." The biggest difference between the two programs is that the cash rewards program credits you automatically each month in the form of a statement credit while the point rewards program requires you to redeem your points when you are ready. If the automatic monthly statement credit is something that is very important to you, it may be better to keep your existing Cash Rewards card. You can always apply for the Platinum Rewards Card at a later time.

Q. What if I want to keep my existing Platinum Cash Rewards Card AND get the new PenFed Platinum Rewards Card?

R. That's great – you should keep your Platinum Cash Rewards Card open and apply for the new PenFed Platinum Rewards Card when it is available in February.

Q. Will I still be eligible for the special 25,000 bonus point offer, even if I apply for the PenFed Platinum Rewards Card instead of switching to it?

R. Yes, you will still be able to take advantage of the 25,000 bonus point offer.

Q. Can I switch back to cash rewards once I make the switch to point rewards?

R. Unfortunately, you cannot switch back to cash rewards. However, you can always keep your cash rewards card and apply for the new PenFed Platinum Rewards Card once it is available in February.

Q. What types of merchandise and gift card items are available for point redemption?

R. There will be over 1,000 brand-named merchandise items and nearly 100 well-known gift card merchants to choose from, including the option to redeem for a generic Visa® prepaid card. Additionally, there will be a wide selection of travel and experiential rewards as well.

Q. Can I see the rewards website so I know what the selection will be before I decide to switch?

R. The rewards website will launch on February 11, 2012.

Q. Can I combine my PenFed Platinum Rewards Card points with my PenFed Premium Travel Rewards American Express® Card points?

R. Unfortunately, you cannot combine your points between programs at this time.

[milechazzer]

I just called PenFed to inquire about the rewards program. The representative assured me that the prepaid Visa cards would be available at the regular rewards redemption rate of 1 point/1 cent.  I don't see any reason not to wait till Feb 11 (when the rewards site is launched) to sign up. But if the prepaid Visa cards will be available at the same rate (as they say they are), and they are offering 25k points (i.e., $250 Visa card) to convert to the new program, I think it's a no-brainer.

[skyguy918]

Does anyone have any updates on this, in terms of receiving the bonus for switching, or in terms of being able to redeem the points at 1cpp to a prepaid visa?

[arch]

Does anyone have any updates on this, in terms of receiving the bonus for switching, or in terms of being able to redeem the points at 1cpp to a prepaid visa?

I just spoke to them, they assured me that its 1 cent a mile. I have the card already, so there wont be ant credit checks, so im probably gonna go for it. Anyone know of any reason for me not to? I dont use the card at all.

[njyenta]

I just got a PenFed platinum cash rewards card.  I'm wondering if I also need a card that gives me miles. If I want to get a good deal on a flight to Israel (I prefer Continental or Elal nonstop) would I do better with miles or cash rewards?  I'm card illiterate and a bit confused about the entire miles/points/rewards business (yes, I've read the links, charts,etc. on this sight)

[Name Changed]

I have the Penfed Amex card with the Premium rewards - points

I had it for about 2 years already. I mostly use it for business - as its an extra line of credit for me. I have racked up over 75,000 points.

I have used the points to go to Florida last year - the redemption was about 15,000 points for each ticket.

 think now they have lowered the redemption value of the points (last year I calculated it to 1.7cpp) it seems like now the redeption is like 1.3cpp - I have just booked a one way ticket to Florida - and it was 9000 points.

They were offering a 25% bonus on the points the last few months of last year so 1.3cpp with a 25% bonus comes out to 1.65cpp - not bad.

For using the point as a redemption on products... on a lot of the products like ipad ect it comes out to $0.09 per point - bad

Basically I would say the redemption is  only worthwhile on travel.

Also I got from spending 15K on this card Priority Club membership for free!

[skyguy918]

I've converted my card and received the first portion of the bonus (5k) for first spend. What I have noticed is that a big reason for the switch might be that in the past they automatically gave you a statement credit every month. That left no chance of people not claiming their rewards. Now you have an account that accrues points, and though I can't find info on how/when they expire, it's clear that they do eventually. This way, they can save on the people who forget to redeem.

[milechazzer]

For those who have switched over from PenFed Cash Rewards to PenFed Platinum Rewards.... it seems that PenFed is planning a change to the Platinum Rewards program.  On the website, it shows that beginning in 2014, gas purchases will be reduced from 5 points to 3 points (per dollar), and supermarket purchases will be reduced from 3 points to 2 points.  Based on the website, it does not appear that there is any changed planned for the Cash Rewards card (which earns 5% cash back on gas). I called customer service, and they seemed somewhat confused and unaware... they didn't seem to really know whether the Platinum Rewards changes would reflect only new cardholders, or whether the change would apply to existing cardholders as well. They also don't know whether or how the Cash Rewards program would change.

Anyway, to play it safe, I cashed in all of my Platinum points and then asked them to switch my account back from Platinum Rewards to Cash Rewards. They weren't sure if they could do that, but eventually it went through. (You may recall that when they originally introduced the Platinum Rewards card and gave us that bonus for switching, they also said no one would be allowed to switch back.) It seemed like a good idea to switch back anyway, since cashback on my statement is better than their points, which have to be redeemed for gift cards.  That being said, I now noticed on my credit reports that it reflects that they closed my Platinum account and opened a new Cash Rewards account, which of course was not what I was looking for on my credit report.

[lunatic]

In case this helps anyone. I was on the phone with Penfed today getting a car loan, and they mentioned that you can get a CC that day with no additional credit check. Might be worth getting this card if you are getting a loan anyway and there is no additional pull

[Zzzzx]

Just got an offer. $100 statement credit if I start using my platinum rewards card again. $1,000 spend required by October, I think. Very much a targeted offer.