New PenFed Restrictions on Cash-Like Transactions

[UpperNwGuy]

Got a letter from PenFed today via USPS announcing that, effective March 1, 2020, the following cash-like transactions will be treated like cash advances with no grace period and subject to the cash advance APR:

-- Online transfers to a deposit account

-- Purchases of casino gaming instruments

-- Purchases of travelers checks

-- Race track wagers or similar

-- Purchases of money orders

-- Purchases of foreign currency

-- Purchases of lottery tickets

-- Purchases of cryptocurrency

-- Making a payment using a third party service

The letter also announced that illegal or abusive behavior will be deemed an action of default and/or breach of contract and grounds for termination.

[FinStar]

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@UpperNwGuy wrote:

Got a letter from PenFed today via USPS announcing that, effective March 1, 2020, the following cash-like transactions will be treated like cash advances with no grace period and subject to the cash advance APR:

-- Online transfers to a deposit account

-- Purchases of casino gaming instruments

-- Purchases of travelers checks

-- Race track wagers or similar

-- Purchases of money orders

-- Purchases of foreign currency

-- Purchases of lottery tickets

-- Purchases of cryptocurrency

-- Making a payment using a third party service

The letter also announced that illegal or abusive behavior will be deemed an action of default and/or breach of contract and grounds for termination.

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I haven't received the letter(s) as of yet, but interesting changes indeed.  The majority on the list seem to be on par to what other lenders consider/treat as CAs, but "Online transfers to a deposit account" (especially if the transfer is to a PenFed checking, savings, etc.), is definitely gonna impact some folks.  And, I wonder what they consider "Making a payment using a third party service"... would that be something like Plastiq, PayPal, Venmo, Zelle or Western Union? 

[Anonymous]

I haven't received the letter either. Thanks for sharing op. 

[AllZero]

Thanks for the tip.

[DaveInAZ]

Strange letter, but I don't have any PenFed CCs and not interested in any, but:

- Online transfers to a deposit account

- Making a payment using a third party service

I don't see how they can legally change a MCC code description, if the MMC code is a purchase it's legally a purchase. I do bank account SUBs regularly and many banks/CUs will let you make the opening deposit with a CC and it almost always codes as a purchase. And I use Plastiq ("third party service" for some payments, they always code it as a purchase. If I had a Penfed CC and they arbitrarily decided to change a MCC coded purchase to a cash advance I'd be talking to an attorney.

But I guess par for the course with Penfed, the Wells Fargo of credit unions.

[longtimelurker]

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@DaveInAZ wrote:

Strange letter, but I don't have any PenFed CCs and not interested in any, but:

- Online transfers to a deposit account

- Making a payment using a third party service

I don't see how they can legally change a MCC code description, if the MMC code is a purchase it's legally a purchase. I do bank account SUBs regularly and many banks/CUs will let you make the opening deposit with a CC and it almost always codes as a purchase. And I use Plastiq ("third party service" for some payments, they always code it as a purchase. If I had a Penfed CC and they arbitrarily decided to change a MCC coded purchase to a cash advance I'd be talking to an attorney.

But I guess par for the course with Penfed, the Wells Fargo of credit unions.

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I don't see the issue.   Doesn't the MCC classify the types of goods/services provided by the merchant, rather than purchase vs cash advance.   We know that opening an account with a credit card can always bit of a gamble, with certain cards working as purchases and other as cash advances, which is why people like DoctorOfCredit have long lists of outcomes. 

So this doesn't strike me as way out there

[RickNATL]

I'll be free and clear since I don't use my cards for any of these transaction types...

[longtimelurker]

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@RickNATL wrote:

I'll be free and clear since I don't use my cards for any of these transaction types...

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"Well Mr RickNTAL, perhaps you would like to explain to the members of the jury why, on Oct 10 2018, Nov 3 2018, Jan 6 2019 and Mar 13 2019, your credit card statement shows purchases of.....  What, you are RickNATL, not RickNTAL, oh sorry."