Do you buy gasoline for your car? Me too. Would you like a no-hassle 5% discount on every tank? Then do what I've been doing for the last few years, use the Pentagon Federal Credit Union Platinum Cash Rewards card. These guys just came out with an affiliate advertising program, so as you might imagine, I signed the blog right up. If you get this card using the links on this page, you can help support this site (since I get a commission on it.) I love it when affiliate programs come out for companies and products that I actually use and can recommend wholeheartedly. I've done Ally Bank, USAA, and now PenFed. Maybe someday Vanguard will come out with one.
5% On Gas
I don't use the PenFed card for much besides gas, but for gas, it's awesome – 5% back. You can get 5% with lots of gasoline-branded cards, but you have to have one for each brand, which is a pain, or you can only do it for 3 months of the year, which is gimmicky. This one can be used at any gas station and you still get your 5% back. There are no caps, tiers, or limits on that 5%. The rewards aren't much for other purchases (0.25%) so you'll need another card if you want to maximize your credit card rewards.
No Hassle
My favorite part about this card is the no hassle cash reward redemption. It just gets applied to your credit card each month. You buy $500 in gas this month? There's a credit on the statement for $25. No muss, no fuss. No logging in to check your rewards, waiting for cards or merchandise to ship to you, or waiting until you accumulate a certain amount ($50 or $200) of rewards before you get them. Just cold hard cash applied to your statement without you having to do anything. It's also a VISA card, so you can pretty much use it anywhere, unlike American Express or Discover.
Setting It Up
I guess there's a tiny bit of hassle. You do have to join Pentagon Federal. That's free if you have any kind of association with the military or another qualifying organization (click on the join now button to see them all). You just have to deposit $5 into a share account and you're a member. If you don't belong to a qualifying organization (and there must be at least 100), you can join Voices for America's Troops as you apply for the card for a one time $15 fee. $20 total, of which you get $5 back if you ever leave PenFed. You can link the card to any bank account and just have the total amount due automatically withdrawn each month. I automate my finances by doing this with all my credit cards.
Other Benefits
There is NO annual fee. There are NO foreign transaction fees. If for some reason you ever have to carry a balance on the card, it's a pretty low interest rate- currently 9.99%. There's even a temporary 0% APR on electronics purchases this month, so if you are buying a TV or computer for the holidays, now might even be a better time to join Pen Fed and get the card. But since you don't carry balances (RIGHT!?), that wouldn't do you any good anyway.
Other Cool PenFed Cards
They have some other cool cards too. Their Platinum Rewards Card (not the Platinum Cash Rewards Card) gives you 5% on gas, 3% on supermarkets, and 1% on everything else, but you do you have to deal with the hassles of a rewards program. It might be worth it to you, and you can always redeem it for a pre-paid VISA cards which spend pretty much like cash. I prefer the Fidelity American Express card for everything but gas (2% on everything, but can only be deposited into a Fidelity account,) but I am missing out on some rewards for grocery store spending. There is also the Promise Card, which doesn't have any rewards, but it's no-fees. At all. Even an over the credit limit fee or a late payment fee. Weird, I know, but I guess it's good for people who pay fees all the time. There's also a card just for military members (and vets) called the Defender Card. It's 1.5% cash back on everything and is also no fees like the Promise Card. It's only 6.99% for the first 5 years, then goes to the regular variable rate (currently 9.99%.) 7% ain't bad for a credit card; it's better than a lot of student loans out there. The Travel Rewards Card is similar to the Platinum Rewards Card, but it's 5% back on airfare and 1% back on everything else.
Downsides of Using Pen Fed For Gas
You have to buy the gas at a gas station and you have to pay at the pump. You can't use a VISA at Costco, and you may not get 5% back on supermarket gas. It has to be “Visa Merchant Category Codes 5542”. If you go inside and pay, that's 5541, and doesn't count. I understand many supermarket gas stations including Safeway, Smith's, King Sooper, and Sam's Club do use code 5542, but you might want to check your first statement just to check.
Other Benefits of Pen Fed Membership
PenFed is also pretty well-known for good CD rates (particularly in January for some reason), decent mortgages, and good home equity loans. Your $5 membership may turn out to be worth more than you think.
Are you buying gas and not getting 5% back on it? Got room for another rewards card in your quiver? I suggest you get the Pentagon Federal Platinum Cash Rewards Card for a no-hassle 5% discount on all your gasoline.
What do you use for gas? Do you use this card? Comment below!
Great to know. I use the AMEX Blue that costs $75 per year and gives 6% back on gas and e% on groceries. PlasticIQ.com is a great place to compare cards. Thanks again.
i need to really compare getting my gas at costco with my costco amex to this.
The Costco thing is a key strike against this card (and other similar high fuel reward ratio cards) for anyone who lives close enough to a Costco and typically fuels up there. I prefer the American Express TrueEarnings Card from Costco. It gives you 3% cash back on gas (up to the first $4,000 annually, 1% thereafter) including at Costco’s own pumps, which in my neighborhood are already 3-5% cheaper than surrounding stations. So you’re saving 6-8% on gas up to the first $4,000, and still saving 4-6% after that if you make a habit of filling up at Costco and using the card to pay. The card also gives you 2% cash back on restaurants and travel…which is probably the biggest discretionary category of spending for us (we don’t fly so much that it warrants the annual fee on most of those airline mile rewards cards…but we do enough traveling with relatives scattered about the country that 2% on the airfares, rental cars etc. really adds up) and then 1% back on everything else. And you can redeem the rewards for straight cash at the end of each year…no minimum level to achieve. You just take your statement into any Costco to the manager’s desk and then watch them count out the crisp bills for you (that’s always a satisfying experience – but you do have to make a separate trip to the bank after that!) There is no fee for the card, but you do have to be a Costco member of course, but if you are already a member and feel you are getting your fee’s worth of value shopping there frequently, then the TrueEarnings card is a no brainer for the combined gas savings alone. If you don’t have access to a Costco or wouldn’t shop there enough warrant the membership ($55/yr for a household) then PenFed makes perfect sense of course.
You just saved me money! Great article and just clicked on the link. 🙂
Loy
Costco is a great option. Unfortunately, it isn’t convenient. We go there once or twice a month, but most of our gas is burned on road trips. I do have a Fidelity Amex which gives 2% back on everything, so that plus the usual (but not always) Costco discount is pretty similar to the PenFed card. But you just can’t beat the no-hassle feature of this card.
I have used the penfed card for gas. But whitecoatinvestor is right, you are limited with a lot of gas stations. Another 5% gas card is the Sallie Mae 5% gas up to 250 bucks per month, 5% off groceries up to 250 bucks per month, 5% off books up to 750 bucks per month, and one percent limited on anything . Since my car runs electricity and gasoline, I really don’t buy much gasoline anymore unles I go on a superlong trip.
For 2% off of anything I use the fidelity AMEX, but I understand priceline VISA has one also, but getting the rewards is a bit more complicated.
I’d lose a lot of money if I was limited to $250 gas and $250 off groceries each month. We’re not that frugal. What I like about this PenFed card is the simplicity. No limits (except at Costco), no fees, no hassle. Just a pure 5% discount on gas.
Does anyone happen to know if this card would work towards marine gas? My father has a boat in south Florida and with gas costing at least $1.00 more per gallon on the water than it does at a gas station on the road,this could really help. I try to pitch in when I can since I’m not paying for anything else for the boat, and with this card I feel I could help out a little more.
I use the card to buy gas on Lake Powell and I get the cash back.
For whatcoatinvestor, for 5% off gas, just use the penfed card. It is unlimited.
For food, you can use blue from american express after spending 6500 to get 6% off food. So there are good choices out there.
You mean the blue cash preferred with the $75 annual fee? That one offers 6% on the first $6000 on groceries. The blue cash everyday only offers 3%. The blue cash card only pays 1% on groceries until you’ve hit $6500 on the card (I hope not just on groceries.) What would I put on the card to get to the $6500 limit? If it were gas, I’d be changing 5% rewards with PenFed to 1% rewards with Blue. If it were something else, I’d be changing 2% at Fidelity Amex for 1% with Blue. That seems like it would eliminate a lot of the possible rewards there.
I might be able to justify the $75 for an additional 4% on $6K of groceries though. That’d be $240-75=$165 in rewards I’m not getting now. But that’s getting dangerously close to “not being worth the hassle” to me.
‘But that’s getting dangerously close to “not being worth the hassle” to me.’
This is why I do index funds, why I will get the PenFed card and only use it for gas, and why I don’t waste time clipping coupons. I want everything as automatic as possible and when I do have free time I just want to play or relax.
Now that Costco accepts VISA, this card is probably even more valuable. Looking into it now but the link to other organizations that will allow you obtain the card for free is broken.
Also – it looks like 5x points for gas, not cash back? Did this change to a typical rewards/points system since this original posting?
Yes, I don’t think you can get the card I have any more. Sorry. It’s a pretty old post.