No. of Recommendations: 2
My first billing cycle just closed on my new Penfed Cash Rewards card. There are some important caveats people that are considering this card should consider. First, the reason that I've obtained the card is that it pays a flat 1.25% cash back on all transacations, which is credited towards your payment (i.e. spend $100 during the cycle, get back $1.25 immediately, your payment is $98.75).

However. There are some serious short-comings to the Penfed card that I wish I was aware of before I spent the $20 to join NMFA and the $5 I have to maintain at Penfed. In other words I'm in for at least $10,000 worth of charges before I can break even.

1. Delay in electronic statement availability.

This may have been a function of this being the first billing cycle. However, a paper statement arrived before my electronic statement was available online. There was a lag time of 5 days. This may only have been a function of this being a new account.

There appears to be an option for electronic only statements so it's not clear to me whether the paper statement is a function of this being the first statement.

2. Poorly accessible online information about statement cycles.

It's there but buried. The only way you know that your statement period has closed is to either count days or look at the small "Due Date" column which will have a date and an amount listed next to it when you have a payment due.

Better interfaces prominently display when your statement period will close, when your payment is due and what the amount of your minimum and full payments are.

3. No external account automatic payments.

You cannot authorize automatic payment from any accounts except Penfed bank accounts. That means you must either move all your banking to Penfed or at least arrange for the amount of money you've spent to be transferred to a Penfed account to be able to pay automatically in full via checking deduction. This also applies to automatic payment of the minimum amount.

All the other credit card companies I've dealt with have had the option to pay in full from other institutions. This is something I wish I had been aware of before I signed up.

This means you cannot automate the entire payment process (i.e. paycheck direct deposited to your checking account, credit card paid in full automatically) which can be handy when life gets a little busy.

4. No float on automatic payment.

I looked at the automatic payment form more closely because I was debating authorizing full payment from the Regular Share account at Penfed that you have to establish. I would then transfer money from my USAA checking account manually each month to cover the payment.

However, the form states the following:
An automatic payment in an amount required to pay off the last billed balance minus any cycle-to-date credits or payments will be applied to my credit card account. The payment will be deducted from my designated account within five days after the billing cycle close date.

Ok, read that again carefully. There is no float. This is how they're likely paying for that extra 0.25%. If you authorize payment in full, or minimum or any type of recurrent payment you pay immediately on statement close.

No other credit card I've held has ever done this with their automatic payments. All have always debited on the statement due date.

On a side note I've discovered USAA has Penfed listed as a payer in the web billpay. My solution to the payment issue is now to authorize payment via the USAA bill pay vs. doing so through Penfed as either way I would have to move money from USAA to Penfed. However, this way I can pay closer to the statement due date.

I'll try to remember to post an update about the statement issues once my next cycle closes.
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