PenFed Promise vs. Barclaycard Ring

May 24, 2013

There is no getting around the unfortunate fact that the majority of American credit card users have debt. All the studies I have found indicate that between one half and two thirds of all credit card users carry a balance each month, and pay interest on their charges. And as unsecured loans with interest that is never tax-deductible, credit card interest is more costly that interest paid on a home mortgage or a student loan.

So when these cardholders are looking for the best product for their needs, they should always be looking for a card with the lowest interest rate and the fewest fees. The Pentagon Federal Credit Union offers its Promise Visa card with a low interest rate and no fees. Meanwhile, Barclaycard features its Ring MasterCard that has low rates and fees, as well as some other innovative features.

Let’s take a look at how these two cards match up against each other:

PenFed Promise

PenFed PromiseThis little known product is among the simplest and most fee-free cards in existence. It features no annual fee, no foreign transaction fee, no balance transfer fee, no cash advance fee, no late fee, no over credit limit fee, and even no penalty APR. New cardholders enjoy a 7.49% APR for three years before the standard rate of 9.99% applies. Furthermore, existing balances can be transferred to this card and will have a rate of 4.99% for the life of the balance transfer, but with no fee.

But if there is one catch, it is that this card is only open to members of the Pentagon Federal Credit Union. And although PenFed was created to offer financial services to members of our armed forces, it is now open to anyone. Eligibility is available to family members and household members of active or retired members of the military as well as several other defense-related organizations. Otherwise, you can join by making a small one time donation to a military support group.

Barclaycard Ring

Barclaycard RingThis card offers an 8% APR interest rate on purchases, balance transfers, and cash advances (not 7.99%!). There is no annual fee and no balance transfer fee. Cash advances cost a modest $1 fee and the foreign transaction fee is a more reasonable 1% than the standard 3%. There is no over-the-limit fee, and the late payment and returned payment fees are $25 instead of the customary $35.

Where PenFed holds the extreme “no fee” ground, the Barclaycard Ring takes a different, but unique stance. It claims to be the world’s first “crowdsourced, community powered credit card.” Cardholders collaborate online to propose new ideas and even vote on them. Customers that save the program money by opting for paper statements or paying on time can enjoy the fruits of their efforts in the form cash back rewards, charitable donations, or a combination of the two. And to be clear that the money is going where promised, Barclaycard takes the unprecedented step of opening its books to its cardholders.

How do these two cards compare?

This is an interesting match-up as these two cards are both unique. The PenFed Promise card is offered by a credit union that is clearly focused on offering value to its members. The Promise card has a slightly lower interest rate for the first three years, and unlike the Barclaycard Ring, it has a promotional balance transfer offer as well. The Promise also wins by having no foreign transaction fee, cash advance fee, or late payment fee.

But Barclaycard should still be commended for thinking outside the box with this innovative product. This kind of social media focused program will probably appeal to the Facebook generation in ways that other banks, and credit unions, cannot.

But for the vast majority of credit card users who struggle with debt, the fee-free PenFed Promise will remain the best deal. Nevertheless, those who are looking for something different and only occasionally incur credit debt, might want to give Barclaycard Ring a chance. Both of these cards are for people who think differently, and it is up to applicants to choose the one that best meets their needs.

Which credit card is right for you? Leave a comment!


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Jason Steele has been dissecting credit card bonuses and loyalty travel programs for years. Digging into the details of credit card offers has enabled his family to vacation in cool places around the world. Pay attention to the details he digs up about which card is best for you.

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