Pentagon Federal Credit Union, also known as PenFed, has dropped the foreign transaction fee from their credit cards. This means that any PenFed credit cardholder will be able to make purchases overseas and will not be charged that pesky extra fee. The foreign transaction fee will be eliminated from PenFed credit cardholders immediately for both new and existing customers.
“Staying true to PenFed’s core principles to bring products to our membership that have everyday value is a key element to the successful growth of the credit union,” PenFed Executive Vice President of Credit of Collections, Deborah Ames-Naylor said in a press release. “Eliminating the Foreign Transaction Fee on all of the credit cards in our portfolio is just our way of creating a unique and competitive line of cards that come packed with practical benefits that our members can actually utilize.”
Foreign transaction fees are a big factor consider when signing up for a new credit card. Foreign transaction fees occur when a purchase is made overseas and then a percentage of that transaction is taxed onto the purchase. Depending on the credit card, normal foreign transaction fees range from three to five percent. Capital One credit cards are some of the few credit cards that do not charge any foreign transaction fee.
Credit cards have been revamping their credit card portfolios in order to attract more consumers in a hard market. Since the Great Recession, credit cards have been loosing steam to debit cards and checking accounts. PenFed hopes the change will keep cardholders satisfied with their service.
PenFed’s new change will not affect their “Best in Class” cards— the PenFed Promise card and the PenFed Premium Travel Rewards American Express Card, which do not charge transaction fees. However, the change will affect the PenFed’s Visa Gold, Platinum Cash Rewards Card, MasterCard, and Visa Classic programs.
The Pentagon Federal Credit Union is the United State’s third largest credit union with more than a million members worldwide. They provide services to members of the military, including the Marine Corps, Coast Guard, Department of Defense, Air Force, Army, Department of Defense, Navy, as well as volunteers of the American Red Cross and their family members.
Credit unions have been gaining popularity this month as major banks across America released their monthly debit bees. Experts have reported that credit unions offer low to no-fee debit cards and credit cards. Bank of America announced $5 monthly fees, and Wells Fargo announced $3 fees, and other major banks are following suit.