Pentagon Federal Credit Union credit card is a SCAM!

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Pentagon Federal Credit Union credit card is a SCAM!

Postby penfedwarning » Sat Jan 19, 2013 3:14 pm

Be warned! I am going to tell you about the Pentagon Federal Credit Union credit card scam that many are falling for including myself! I applied for the Penfed credit card for the same reasons others do and that is the supposed rewards it offers. What they don't tell you though are the costs you will have to pay to get those awards and how unethical the company is with issuing credit.

I have a flawless credit history of years with not a single late payment, no debt and credit lines in the tens of thousands on three of my cards. But be warned! The one thing I did not have was an installment loan like a mortgage. The heavily weigh this in their credit score. If you don't have one they don't care how good your credit history is. They will either not issue you any credit or issue an extremely low amount. Unless you have a mortgage you might not get a Penfed credit card or auto loan. They would rather you have a risky subprime mortgage that you're underwater on than have responsible credit history.

If that was not bad enough your Penfed credit card starts accruing interest almost immediately! With a grace period of only 10 days by the time it's printing and mailed to you you will probably have one or two days at most to pay your bill and have the payment clear. Good luck with that! They do this so they can slap you with interest and late fees easily. They reel you in with the rewards and then use it to impose unfair credit card practices so they can nickel and dime you to death!

On top of that to get the card you are forced to make a "donation" to their foundation. They claim its not profit but are there administrative overhead and salaries paid to you know who?

Be warned! Pentagon Federal credit card is a for profit scam. Stay away!

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Mogul of Pineapples
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The above post is completely incorrect (updated 2013)

Postby Mogul of Pineapples » Tue Jan 22, 2013 1:39 pm

Your post is completely incorrect. PenFed is a quality credit union.

The Penfed credit card has a 25 day grace period, not a 10 day like you claim. The 10 days is the time it will take after the grace period if you don't pay until it's considered delinquent. That means if you don't pay your bill 35 days after the closing statement, it will be considered delinquent. That is far from the 10 days you claim.

This is a credit union, not a bank. They do not benefit at all from their foundation donations, which is a non-profit. It sounds as if the OP doesn't even have a loan or credit card from Pentagon Federal credit union. In short there is no "scam" going on here.

However something to be aware of is the strenuous approval process. They are ultra conservative with their credit underwriting. Not only do you first need to join their credit union, but when you apply for a card, the typical requirements for approval are:
  • Providing copy of your income tax returns for the past 2 years
  • Provide copy of your last 2 pay stubs
  • If you are married, you may also be asked to do the same for your spouse, regardless of whether or not they will be on the credit card account.
  • Mortgage or rent information
On top of that, your credit score needs to be ridiculously good. Even those with FICOs in the 800's frequently get turned down if they have too many inquiries or their credit utilization isn't to PenFed's liking. To give you an idea of how difficult it is, less than 1% of people who applied through CreditCardForum for their card last year were approved. Even myself, who has close to a 800 FICO and a 100% flawless credit history, was denied credit by PenFed.

For those reasons many of the Pentagon credit card reviews have been negative, but that is more directed at the rules and restrictions rather than the card itself. However as of 2013 their gas card rewards are lower than before. Now you only get 1/4% cash back for spending outside of the gas category. For these reasons, you may want to consider some of these other good gas cards.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

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Postby azzarom » Sat Jan 26, 2013 2:11 pm

I agree with Mogul, the original poster has no idea what they're talking about. I just joined PenFed, and have good but not excellent credit. I applied for their Visa Platinum card, for $30,000. I got a counter offer for the same card, but for $15,000, which is plenty so I accepted. The card's purchase apr is a comparable 13.99%, but the main reason I wanted the card was the 2.99% balance transfer (for the life of the balance!). There is a small balance transfer fee, which is the norm, and capped at $100. A small price to pay for saving over 10% from what i'm paying now! I think what poster was referring to as a 'donation', he completely failed to read.. you simply have to put a minimum amount of $5 into YOUR account. It's not a donation, you're just putting something in your account. Next time read the terms and stop whining about stuff you don't understand!

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PenFed Credit Card IS A SCAM

Postby Neal Zimmerman » Tue Jan 29, 2013 5:48 pm

My purpose in joining PenFed Credit Union was to obtain the benefits of a PenFed credit card. They required a $20. account activation fee for non military members. After opening the account, I was informed that the credit card would be "in the mail".

After a month of waiting for the credit card which never arrived, I contacted PenFed. I was told that I now had to submit two years of tax returns in order to be considered for a credit card.

I was never informed that I would have to submit tax records as a condition for obtaining my credit card. I have never been asked for tax records to obtain a credit card, and I have never been denied a credit card. MY CREDIT RECORD IS OUTSTANDING. Requesting tax records from me - after ignoring my application - is highly irregular and suspicious.

I feel that the entire process of obtaining a credit card from PenFed has been misrepresented to me and I have requested the return of $20. which I feel they obtained from me under false pretenses. STAY AWAY FROM THEM.

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Postby tyler349 » Fri Feb 01, 2013 12:08 pm

I had a similar experience with my Penfed credit card. I made the mandatory 'donation' to join the credit union and then was not approved for my Visa. I ended up having to get a co-signer in order to get approved. The crazy thing is that I have a FICO score of 770 and no negatives, no late payments, no blemishes at all on my credit report. If they can't approve someone like me then I don't know who they will approve. Unless you have a 800+ score and a flawless credit history decades old I would avoid Penfed because you probably won't end up being approved.

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Postby justcred » Sun Feb 03, 2013 9:50 am

I think it speaks volumes about the user that is trying to get a refund of his 20 dollar donation to the NFMA. I applied for my card, and they want paystubs - does it shock people that a CREDIT UNION (not a bank) is evaluating the people it issues credits too much more carefully then a lot of the large banks. I am happy people are getting turned down.

And a 770 isnt a guarantee for credit, whats your mortgage balance, have you ever had a negative, how many inquiries do you have? The list goes on....

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Postby idmd » Tue Feb 05, 2013 12:49 pm

I'll second, or third or forth the responses already given. There are fundamental differences between a large bank and a CU. For the current members of PenFed they should feel good that the CU is "picky" in who they issue credit to and selectivity may even be one of the reasons their credit products are so good.

It's natural to be "offended" when someone will not issue you credit (especially when - and it always is - your credit is absolutely pristine). You have to remember it's a business decision they are making based on a whole lot of factors you're not privy to at the time of your application.

I'm in the process of applying for their Visa, my application is still pending and yes I've spent $25 bucks to potentially have them turn me down. If that happens I'm not going to take it personally - for them it's not a personal decision.

As far as them scamming people?? The process of applying to the CU and for credit products is pretty transparent, lots of people do it and are accepted, and in these economic times no one is guaranteed anything. Remember, extending credit to people with low to no standards is partially how we got where we are today

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Postby debt_free_2013 » Thu Feb 07, 2013 10:38 am

I know it's an old thread but to counter the negative post if someone else stumbles onto this one, ... Sounds like you don't know what you were doing,

PenFed wasn't charging you an activation fee, You spent the 20-bucks to join a qualifying organization so you could join the credit union, I joined and spent the 20-bucks also, a one-time fee to join and nothing more than that,

If they were slow to respond to you, it's likely they were swampped with applications from people who had a much better understanding of what they were doing,

Be aware, PenFed is rather conservative and does verify income and if they asked you for tax returns, you're likely self employed, I app'd for the cash-back Visa card and refi'd my car with them a week after joining, They asked for my last two leave and earnings statements and I was approved for a 15-k CL Visa and 14-K @3.99% for my refi,

Very hassle free, I highly recommend, two thumbs-up !!

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In no way are Pentagon Fed credit cards a scam.

Postby alynn » Thu Feb 07, 2013 10:38 am

Pentagon Fed has been honest, truthful, fair and transparent in all of their credit card dealings with me. I have found their card offerings, including the one I have, to offer the best rates and rewards available. And I shopped around.

No only are Pen Fed's card offers NOT A Scam, their cards are a deal!

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Postby CCG » Sat Feb 09, 2013 5:21 pm

You know for 2013, another good cash back card you may want to consider is the new Discover It card. Funny name, but the rewards program is no laughing matter.

Go here to see my review and how it compares

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