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A credit card with no late fees? No balance transfer fees? No fees at all? Yup, it's a Promise.

2 minute read

When I tell people I write about credit cards for a living; I get reactions ranging from vague interest to outright hostility.

Some people just hate credit cards with a passion. But I know that I can talk most of them down from the ledge by telling them about the PenFed Promise, which is a card like no other.

What is the PenFed Promise?

PenFed, as the Pentagon Federal Credit Union is known, is the name of the card issuer. Promise is the name of the card. To understand this unique product, keep in mind that PenFed isn’t a bank — it’s a non-profit institution that exists to serve members of the U.S. Armed Forces, as well as government and defense-related organizations and their families.

But anyone can join the credit union by signing up for what’s called a “military support organization,” which requires a small, one-time fee. For example, you can join Voices for America’s Troops for $14 or  the National Military Family Association for $15.

Then you go the PenFed membership page and choose your organization from a drop-down menu. That’s all it takes to become a member and qualify you for this card.

So what makes their Promise card unique?

It’s the only credit card that charges no fees for anything.

That means no annual fees, foreign transaction fees, late fees, balance transfer fees, or even a penalty interest rate.

Even better, new applicants receive:

  • a promotional balance transfer rate of 4.99 percent for 12 months
  • a promotional rate for new purchases of 7.495 percent for 36 months
  • a standard interest rate of only 9.99 percent

Can’t beat that.

What’s the catch?

Every other credit card has a whole menu of fees, so how can PenFed get away without charging any? I’ve sat down with people from PenFed and asked them pretty much the same question.

They tell me that their mission is to provide services to their members, not to make a profit for their shareholders. Basically, Promise is their attempt to see how low they can make a credit card’s rates and fees without losing any money, profits be damned.

Frankly, if I was a product manager at a regular bank and I was judged on the profits I generated, I’d think that PenFed was cheating — and this whole credit union thing was a little unfair to regular corporations.

So as much as I love credit cards, I’d have to say that this is the product for people who hate them. Those who get tripped up by fees and are angry at paying high interest rates will find this to be the most reasonable card out there.

So before you go on another rant about the horrible banks and their profit-driven excesses, take a look at the PenFed Promise. It might not change how you feel about banks, but it will change how you look at credit cards.

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About the Author

Jason Steele

Jason Steele

I'm one of the country's leading experts on credit cards and have been regularly syndicated by mainstream outlets such as MSN Money and Yahoo! Finance. I live in Denver, Colorado with my wife and two daughters, and we love to travel. We often fly first-class, not because I'm rich, but because I know how to acquire credit card miles in the most efficient way. Keep reading, and I'll teach you, too.

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