PenFed Promise Change In Terms

[BearsCubsOtters]

I have had a PenFed Promise card for nearly 10 years. When I first signed up it was 7.49% fixed for three years and then would reprice to a then 9.9%. A week after I accepted my approved offer, they changed Promise to have a range of APRs and could have gotten 7.49% ongoing (variable).

Anyway, today I received a Change In Terms notice for my Promise card indicating a new APR of 14.74 plus Prime Rate, currently 17.99% with cash advances at 17.99% fixed. 

The letter indicates the changes go into effect 4/1/2024 with the option to opt out (for those carrying a balance, opting out would close the account but keep the prior APR until the balance is paid) with an opt out code. 

Promise offers no rewards and my APR currently is 14.49% which is good but not great for card from the 3rd largest CU in the US with no rewards (not that I carry balances, but it is the principle: great credit = best rates). I liked having an ongoing credit relationship with them and prior to 2022, they would run promos twice a year (spend $500, get $50 etc.) but that stopped. So, time to close this one out. 

Overall, PenFed has really disappointed me over the past few years. No more soft pull approvals; Experian HP for loans and now this. They used to be really good. 

[CreditCuriosity]

Got same noticed of 17.99 on a different card though.  Welcome to interest rates hikes and CU catching up and likely losses mounting for all lenders.  I still have a card at 7.49 and some as high as 32% I think?  Credit isn't cheap whether it is a CC, Home loan, auto loan etc these days.  Hopefully some relief will come later this year or next as inflation is still hot in my opinion.

[BearsCubsOtters]

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@CreditCuriosity wrote:

Got same noticed of 17.99 on a different card though.  Welcome to interest rates hikes and CU catching up and likely losses mounting for all lenders.  I still have a card at 7.49 and some as high as 32% I think?  Credit isn't cheap whether it is a CC, Home loan, auto loan etc these days.  Hopefully some relief will come later this year or next as inflation is still hot in my opinion.

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Very true. I noticed a few months ago on their website that the new cards available for application were all at 17.99% so this shouldn't have been a surprise to me. I wish I could at least change it to Power Cash but no dice. 

[CreditUp26]

PenFed is in a tailspin with regards to their offerings and customer service. It's really sad, they used to be a great credit union that supported veterans. Now it feels like a cash grab. Closed one account with them, possibly closing more.

[smarzig]

What's the alternative? 

This one was nice to carry a balance.

[Horseshoez]

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@smarzig wrote:

What's the alternative? 

This one was nice to carry a balance.

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The best alternative is to not carry a balance.  Beyond that, there are still a few credit unions out there offering interest rates below 18%, but there are fewer and fewer of those with every passing week.

[CreditUp26]

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@Horseshoez wrote:

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@smarzig wrote:

What's the alternative? 

This one was nice to carry a balance.

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The best alternative is to not carry a balance.  Beyond that, there are still a few credit unions out there offering interest rates below 18%, but there are fewer and fewer of those with every passing week.

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Literally every credit union I belong to has something under 18%, except for one other than PenFed. SDFCU, Signature FCU, NFCU, Unify FCU, Redstone FCU, plus others that are not open to the general public. Unify even has a fixed rate under 10%. 

[Horseshoez]

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@CreditUp26 wrote:

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@Horseshoez wrote:

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@smarzig wrote:

What's the alternative? 

This one was nice to carry a balance.

---

The best alternative is to not carry a balance.  Beyond that, there are still a few credit unions out there offering interest rates below 18%, but there are fewer and fewer of those with every passing week.

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Literally every credit union I belong to has something under 18%, except for one other than PenFed. SDFCU, Signature FCU, NFCU, Unify FCU, Redstone FCU, plus others that are not open to the general public. Unify even has a fixed rate under 10%. 

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I expect that won't last long; my bet is pretty much every credit union runs rates up to 17.99% before too much longer.

[CreditUp26]

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@Horseshoez wrote:

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@CreditUp26 wrote:

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@Horseshoez wrote:

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@smarzig wrote:

What's the alternative? 

This one was nice to carry a balance.

---

The best alternative is to not carry a balance.  Beyond that, there are still a few credit unions out there offering interest rates below 18%, but there are fewer and fewer of those with every passing week.

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Literally every credit union I belong to has something under 18%, except for one other than PenFed. SDFCU, Signature FCU, NFCU, Unify FCU, Redstone FCU, plus others that are not open to the general public. Unify even has a fixed rate under 10%. 

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I expect that won't last long; my bet is pretty much every credit union runs rates up to 17.99% before too much longer.

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I notice you only have one credit union in your signature, and it's PenFed. Not all credit unions are as poorly run as PenFed (see recent news about their financial losses). It's very common for credit unions to have low rates, though they are usually variable and increase with prime rate. It's not uncommon when rates are lower to see rates at 7 or 8%. Keep looking for better credit unions, PenFed has more of a bank mentality than a credit union mentality which may be because of its size. 

[Horseshoez]

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@CreditUp26 wrote:

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@Horseshoez wrote:

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@CreditUp26 wrote:

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@Horseshoez wrote:

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@smarzig wrote:

What's the alternative? 

This one was nice to carry a balance.

---

The best alternative is to not carry a balance.  Beyond that, there are still a few credit unions out there offering interest rates below 18%, but there are fewer and fewer of those with every passing week.

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Literally every credit union I belong to has something under 18%, except for one other than PenFed. SDFCU, Signature FCU, NFCU, Unify FCU, Redstone FCU, plus others that are not open to the general public. Unify even has a fixed rate under 10%. 

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I expect that won't last long; my bet is pretty much every credit union runs rates up to 17.99% before too much longer.

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I notice you only have one credit union in your signature, and it's PenFed. Not all credit unions are as poorly run as PenFed (see recent news about their financial losses). It's very common for credit unions to have low rates, though they are usually variable and increase with prime rate. It's not uncommon when rates are lower to see rates at 7 or 8%. Keep looking for better credit unions, PenFed has more of a bank mentality than a credit union mentality which may be because of its size. 

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So you've drawn your conclusion to dismiss my comments just because I only have one credit card from a credit union; bad assumption.  Not that it matters for the purposes of this discussion, but having only one credit union card does not in any way mean I am only a member of one credit union (three actually).  Rates of 7% and 8% used to be the norm, but if you look around, there are few, if any, credit unions offering those rates for new cards, regardless of credit worthiness.  In my case, I could care less about credit card interest rates because I don't pay interest, so to me, there is zero difference between a hypothetical 7% card and a 33% card, at least from the perspective of what I pay for my purchases.