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PenFed credit card question
Old 02-28-2010, 06:57 PM   #1
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PenFed credit card question

Hi,

Been awhile since I've posted so hope everyone's doing well.

I have a question for those of you who have accounts with PenFed.

I have an AMEX charge card that I use for all of my primary purposes, incl. Costco. I pay it off every month and collect rewards points. I like the card, have had it for years, and find the customer service is particularly good. Have had this card since 1999. I also have a Citi Platinum Rewards Mastercard as a basic, no frills, no annual fee second card, mostly for places that don't take Amex. This card I have had since about 1994 and has a $25K credit limit although I only charge about $20 or so a month on it (and pay it off at the end of the month). For many years these were the only 2 cards I carried.

With all the news about the credit law changes, I have been worried about the Citi card starting to charge an annual fee (so far, they haven't). As it is a back-up card I would rather not pay it but since it is one of my oldest credit lines and carries a high limit I don't want to cancel either as I think it will impact my Fico score (currently hovers around 800).

So a month or so ago, I decided that it may be a good idea to open up a new credit line somewhere in case Citi did start charging a fee, so at least I had the option of eventually cancelling it. After researching here and elsewhere I thought a credit union would be the best choice since it seems they would be less likely to charge outrageous fees for things. So I joined PenFed, and opened up a Visa account with them (the one that pays 5% back on gas) and figured I would also use it as the primary gas card.

Before I applied, I checked my own credit score - 810 so no issues there. However when I applied I asked for a $10K limit, but was counteroffered at $2500, and even with that had to supply last two paystubs, and last year's W-2. My income is pretty good (over $100K last year and the year before) so I am a little confused about the low line of credit.

Is this typical of PenFed and can I expect them to increase the credit line over time? Otherwise, I will still be in the same predicament of at Citi's mercy if they start charging an annual fee...as cancelling a $25K line and replacing with a $2.5K line isn't helpful...
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Old 02-28-2010, 07:11 PM   #2
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My experience of Pen Fed is that they are a very conservative lender. You may have hit some sensitive point of theirs. It might be worth calling and asking what is up. No harm in trying and maybe you can get them comfy with you.
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Old 02-28-2010, 07:16 PM   #3
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Thanks Brewer. With everything they put me through just to get the $2500 line (W-2's? for a credit card? really?) I didn't really want to call them right away. But I was thinking maybe after a few months of charging and paying, so they know I ain't a deadbeat...
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Old 02-28-2010, 10:04 PM   #4
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Strange. I applied and got a larger credit line without any fuss. I have several CDs with them, and I previously obtained and paid off a car loan with them; perhaps that makes a difference. I don't know my credit score, but I'm guessing it's pretty good.

After that I applied for the Costco AMEX and got a rather low limit, but I have two other AMEX cards, and they asked me if I wanted to take credit limit away from the AMEX Blue and put it on the Costco. (My third AMEX is a corporate charge card.)
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Old 02-28-2010, 10:09 PM   #5
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I had no trouble increasing my credit line from $5k to $20k/year with them 1 year ago. I originally opened my account with them 3 years ago to obtain a $7k CD, and obtained the rewards card through them 2 years ago. My income during that time was not high at all, as I am a student, and only make $30k/year. My credit rating is in the high 700s, and they did the credit increase immediately over the phone after doing a hard credit pull.
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Old 02-28-2010, 11:40 PM   #6
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Hmmm...I wonder if it makes a difference than if I open some CDs or other savings with them. Right now I only have the credit card with them.
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Old 03-01-2010, 12:47 AM   #7
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Quote:
Originally Posted by caninelover View Post
Hmmm...I wonder if it makes a difference than if I open some CDs or other savings with them. Right now I only have the credit card with them.
Yes, very much so. Kinda makes sense, doesn't it ?
I had several $10K of CDs with them, and they gave me
a card with $10K credit in about 5 minutes.

One thing, if you get them to auto-pay your card from
your hometown bank account, they do it on the last possible
penalty/interest-free day, which is awesome. But it effectively
halves your credit line, sorta kinda.
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Old 03-01-2010, 06:03 AM   #8
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I have a visa with them.
First time I applied, they denied me.
6 month later $1000.00 max credit.
They denied an increase of credit.
I planned to use this card for everything to benefit from their large rebate.
So now I have to pay several times per month on line in order to get all the rebates and not go over the credit limit.
It's a PITB but worth the 40.00 to 50.00 rebate per month. I'll try to get some history with them before asking for an increase in a few moth.
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Old 03-01-2010, 07:50 AM   #9
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My experience--PenFed Visa was approved in 11/08 with an initial credit limit of $20,000. My credit score is high 700s. I had no CD's with PenFed at the time.
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Old 03-01-2010, 08:07 AM   #10
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Got my PenFed Visa (late '08) after I retired and had no account with them prior -- credit limit of $20k with no documentation requested. Guess they have tightened credit limits (or combined credit card limits). At the time I got the PenFed visa, I already had two other cards with $20k limit.
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Old 03-01-2010, 11:36 AM   #11
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Got mine over 20 years ago, and whenever I got close to my limit, they raised my limit. Once it got to a certain point, it has remained stable, since I never get anywhere near my present limit, despite using it for nearly everything.

My guess is that if you're patient and use it a lot, they will raise your limit automatically, as they did with me.
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Old 03-01-2010, 06:23 PM   #12
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Canine they are conservative and the new law just rolled out. Looks like they tightened up even more. They have me at 10K right now and I remember when I was a new customer they would not let me pay more than the balance due, seemed like an odd restriction.
I suspect they'll raise your limit after 6 mos a year etc...
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Old 03-01-2010, 07:40 PM   #13
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I work in the credit card industry, and many companies use the voluntary information on the application (ie. do you want a certain credit line) as risk indicators. By requesting a certain line, you may have revealed yourself to be riskier than you apparently are. Over time, your account behavior and relationship with Pen Fed will likely lead to a higher line.
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Old 03-02-2010, 02:45 AM   #14
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Thanks everyone, for your answers. Based on your feedback, I'll keep doing what I was doing, and probably open a few CDs with them in the next month or two (I was looking at doing this anyway). Maybe that will help, but over time I expect that combined with my usual prompt payment behavior should set me up for a higher line of credit.

Just so weird that someone with my credit/assets/income has to do this, but guess its a sign of the times...I was thinking, I wonder if I'm the "victim" of some geographic profiling...unemployment in SoCal is high, but I've been with the same employer for 11 years now...
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Old 03-02-2010, 06:54 AM   #15
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Pen Fed definately looks at geographic location, especially if you are non-military. When my sister was looking for a mortgage a few years ago they told her that due to her market area they had higher requirements to do the loan. This was before the poop hit the fan.
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