CARDHOLDER AGREEMENT

DEFINITIONS.  The  “Card”  means  the  Pentagon 
Federal  Credit  Union  (PenFed)  credit  card 
which  we  issue  to  you  under  this  Agreement, 
and includes any device or check used to obtain 
credit or cash from the Account. Unless otherwise 
stated, “Account” means your Card Account with 
us. An Authorized User is an individual receiving 
a Card, but who has no responsibility for payment 
of  the  Account.  The  words  “you”,  “your”  and 
“cardholder”  mean  each  person,  jointly  and 
individually  who  holds,  signs,  retains,  uses,  or 
permits others to use or sign a Card. The words 
“our”,  “we”  and  “us”  mean  PenFed  or  any  of  its 
assignees.
1.  AGREEMENT. We agree to extend credit to you 
and advance amounts up to your credit limit, but 
transaction  limits  may  apply.  Your  credit  limit  is 
not increased by any credit balance you may have 
on  your  Account.  You  agree  to  sign  the  back  of 
the Card as soon as you receive it. You agree to 
pay us for credit extended for the use of the Card 
by  you  or  any  other  cardholder,  along  with  all 
applicable finance charges, fees and insurance, if 
any apply. By signing, using or permitting others 
to  use  the  Card,  you  agree  to  the  terms  and 
conditions  contained  in  this  Agreement,  on  the 
Card, on any charge slip resulting from authorized 
use of the Card, on any authorized cash advance 
slip,  and  to  accept  responsibility  for  all  actions 
taken with the Card.
2. CREDIT LIMIT. You agree to use the Card within 
the credit limit we authorize. You also agree that 
we can change your credit limit at any time. We 
are  not  obligated  to  accept  charges  that  would 
cause you to exceed your authorized credit limit 
but  we  may  do  so  in  our  sole  discretion.  Any 
extension  of  credit  to  you,  made  or  honored  by 
us,  shall  be  at  such  times  and  in  such  amounts 
and  for  such  purposes  as  to  conform  to  this 
Agreement, and only when there is no default.
3. CHANGE IN TERMS. You agree that the terms of 
this Agreement are applicable to any cardholder. 
You also agree that we can change the terms of 
this Agreement at any time by adding, deleting, 
or  modifying  any  provision  of  the  Agreement. 
We  will  give  you  notice  of  any  such  changes,  if 
required by law.
Termination  of  the  Account  by  you  or  PenFed 
will not affect your obligation to pay the Account 
balance  plus  any  finance  charge  and  other 
charges you owe under this Agreement. You are 
responsible  for  all  transactions  made  to  your 
Account after termination, unless the transactions 
were unauthorized. Should you choose to cancel 
your  Account,  the  terms  in  effect  at  the  time 
that  you  cancel  the  Account  will  apply  until  the 
outstanding  balance  of  the  Account  is  paid  in 
full,  unless  you  are  in  default.  Your  Card  will  no 
longer be available for use for new transactions, 
including  purchases,  as  the  Account  will  be 
closed  (if  it  is  not  already  closed.)  Any  rewards 
you  have  earned,  if  applicable,  will  be  forfeited 
unless they are redeemed before the Account is 
closed.  If  you  do  not  notify  us  of  your  decision 
to  terminate  the  Account  by  the  date  stated  in 
any  notice  we  provide,  or  if  you  notify  us  but 
then use the Account after the date stated in the 
notice, you will be deemed to accept all changes 
to  the  Account’s  terms  and  conditions  of  this 
Agreement.
If  you  are  in  default  because  your  payment  has 
not been received within 60 days of the due date, 
you  do  not  have  the  right  to  reject  the  changes 
we  make  to  this  Agreement  or  the  Account’s 
terms and conditions.
4. FINANCIAL  CONDITION  CHANGE.  You  agree 
to  advise  us  of  any  change  in  your  financial 
condition  that  may  affect  your  creditworthiness 
and to provide us with a current loan application 
whenever  we 
request  one.  You  expressly 
authorize  any  person,  partnership,  association, 
firm, corporation or consumer reporting agency, 

upon our request, to furnish us with information 
concerning  you  relevant  to  the  review  and 
evaluation  of  this  Account.  You  understand  and 
agree that we may terminate your Account upon 
reevaluation of your creditworthiness.
IMPOSED 
5. FINANCE  CHARGES  WILL  BE 
IN  THE  FOLLOWING  MANNER  AND  WILL 
BE  IN  AMOUNTS  NOT  IN  EXCESS  OF  THOSE 
PERMITTED BY LAW:
A. PURCHASES:  (1)  No  finance  charge  will  be 
imposed during the next billing cycle (defined as 
the time interval between regular monthly billing 
statement dates) if you pay the entire new balance 
shown on the current periodic statement and we 
receive your payment on or before the payment 
due date shown on the statement. (2) In all other 
cases,  a  finance  charge  will  be  imposed  based 
on  the  average  daily  balance  of  all  purchases 
and  debit  adjustments,  hereafter  referred  to  as 
purchases. The average daily balance is the sum 
of all outstanding purchases, which is determined 
by 
including  new  purchases  and  deducting 
payments  or  credits  and  excluding  any  unpaid 
finance charge for your Account on each day of 
the  billing  cycle  divided  by  the  number  of  days 
in the billing cycle. A purchase appearing on the 
periodic  statement  is  considered  a  part  of  the 
outstanding balance from the date of posting. (3) 
The  amount  of  the  finance  charge  is  calculated 
by  multiplying  the  average  daily  balance  for 
purchases  by  the  monthly  periodic  rate.  The 
monthly  periodic  rate  is  the  yearly  interest  rate 
divided by 12.
B. CASH ADVANCES. (1) There is no grace period 
on cash advances. Finance charges accrue on all 
cash  advance  amounts  from  the  date  charged 
to  your  Account  and  continue  so  long  as  such 
amounts remain outstanding. (2) A finance charge 
will  be  imposed  on  the  average  daily  balance 
of  cash  advances,  which  is  the  sum  of  the  cash 
advances outstanding each day during the billing 
cycle, divided by the number of days in the billing 
cycle. The sum of cash advances is determined by 
including new cash advances and deducting any 
payments  or  credits  and  excluding  any  unpaid 
finance charge. A cash advance appearing on the 
periodic  statement  is  considered  a  part  of  the 
outstanding  balance  from  the  date  of  posting. 
(3)  The  amount  of  finance  charge  is  calculated 
by  multiplying  the  average  daily  balance  for 
cash advances by the monthly periodic rate. The 
monthly  periodic  rate  is  the  yearly  interest  rate 
divided by 12.
C. BALANCE  TRANSFERS.  (1)  There  is  no  grace 
period  on  balance  transfers.  Finance  charges 
accrue  on  all  regular  or  promotional  balance 
transfer  amounts  from  the  date  posted  to  your 
Account  and  continue  so  long  as  such  amounts 
remain  outstanding.  (2)  A  finance  charge  will 
be  imposed  on  the  average  daily  balance  of 
balance transfers, which is the sum of the balance 
transfers outstanding each day during the billing 
cycle, divided by the number of days in the billing 
cycle. The sum of balance transfers is determined 
by including new balance transfers and deducting 
any payments or credit and excluding any unpaid 
finance  charge.  A  balance  transfer  appearing 
on  the  periodic  statement  is  considered  a  part 
of  the  outstanding  balance  from  the  date  of 
posting.  (3)  The  amount  of  finance  charge  is 
calculated  by  multiplying  the  average  daily 
balance for each balance transfer by its monthly 
periodic  rate.  The  monthly  periodic  rate  is  the 
yearly  interest  rate  divided  by  12.  If  you  transfer 
a balance from another financial institution to us, 
you will immediately incur finance charges at the 
regular or promotional APR available at the time 
of  the  balance  transfer  and  on  purchases  at  the 
purchase APR. For instance if you transfer $1,000 
at a promotional rate of 0% APR and then make 
a purchase of $200, you will immediately accrue 
finance charges at the purchase rate, forgoing the 

grace  period.  To  avoid  finance  charges  on  new 
purchases after you transfer a balance, you must 
pay  all  balances  on  your  Account  including  any 
balances that you transfer in full by the due date.
6. PAYMENTS.  A  payment  delivered  by  regular 
U.S. mail must be sent to the address indicated on 
your  periodic  statement.  Your  payment  by  mail 
must  be  a  check  or  money  order  in  U.S.  dollars 
with your account number on the check or money 
order  and  drawn  on  a  U.S.  financial  institution, 
and  be  accompanied  by  the  payment  voucher 
from your statement. Write your account number 
on your check or money order. All such payments 
will be posted to your Account as of the date we 
receive  them  provided  we  receive  them  before 
5:00  p.m.  at  the  address  indicated  on  your 
periodic  statement.  Payments  received  at  other 
locations or not conforming to these procedures 
may be delayed in posting, but not more than 5 
business days from the date of receipt.
PenFed,  in  its  sole  discretion,  may  accept  a 
check  for  payment  on  your  Account  even 
though  payment  was  made  before  the  date 
of  the  check  or  a  check  which  has  a  date  more 
than  6  months  old.  For  the  first  six  months  all 
payments  received  from  PenFed  members  who 
have  held  membership  for  six  months  or  less 
will  be  credited  to  your  Account  as  of  the  date 
we  receive  them,  but  credit  in  the  amount  of 
the  payment  will  not  be  available  to  you  for  10 
calendar  days.  Payments  made  electronically 
through  our  automated 
telephone  service, 
member  service  representatives,  or  our  website 
will be subject to any processing times disclosed 
with those payments.
Your  minimum  payment  due  is  the  greater  of 
$15  or  2%  of  the  new  balance  plus  the  past  due 
amount,  if  any,  and/or  all  amounts  in  excess  of 
the  authorized  credit  line/limit  shown  on  the 
periodic statement. If the new balance does not 
exceed  $15,  only  the  new  balance  total  is  due 
and  is  shown  as  the  minimum  payment  due.  All 
past due or over limit amounts are due and must 
be  fully  paid  immediately  upon  notification.  You 
may,  however,  pay  the  total  amount  due,  which 
is shown as the new balance, or you may pay any 
additional  amount  you  wish  over  the  minimum 
payment due.
If your payment is not honored or we must return 
it  to  you  because  it  could  not  be  processed, 
a  charge  may  be  made  to  your  Account  in  the 
amount  indicated  for  “returned  payment”  on 
PenFed’s  current  Schedule  of  Service  Fees 
brochure. In addition, for the 6 months following 
any such dishonored payment, any payments you 
make will be credited to your Account as of the 
date  we  receive  them,  but  credit  in  the  amount 
of the payment will not be available to you for 10 
calendar days.
You  understand  and  agree  that  the  minimum 
monthly payment will be applied first to the card 
balance  with  the  lowest  APR  in  the  following 
order:  finance  charges,  credit  life  fees  (if  any), 
cash  advance  balances,  and  purchase  balances. 
You  understand  and  agree  that  payments  in 
excess  of  the  minimum  monthly  payment  will 
be  applied  first  to  the  card  balance  bearing  the 
highest  rate  of  interest,  then  to  each  successive 
balance bearing the next highest rate of interest 
until the payment is exhausted.
7.  DEFAULT.  You  will  be  in  default  if  you  fail 
to  make  any  payment  by  the  Payment  Due 
Date  shown  on  your  Account  statement,  if  you 
become  insolvent  or  file  bankruptcy,  if  you 
become  incompetent  or  die,  if  a  judgment  or 
garnishment  should  be  issued  against  any  of 
your  property  including  any  of  your  Accounts 
with us, if we in good faith consider our or your 
obligations  or  your  ability  to  repay  or  perform 
your  obligations  with  us  unsafe  or  insecure,  if 
this  Account  or  any  other  account  at  PenFed 
is  maintained  by  you  in  a  manner  that  PenFed, 
in  its  sole  discretion,  deems  contrary  to  sound 

financial  practice,  or  if  you  fail  to  live  up  to  any 
of your other agreements with us, to include any 
PenFed policy or procedure. Subject to law, if you 
default on this Agreement, we can, without giving 
anyone  notice,  demand 
immediate  payment 
of  the  remaining  balance  due  including  but  not 
limited  to  any  unpaid  finance  charges,  late  fees 
and any other charges due under this Agreement. 
You  also  agree  our  obligation  for  further  credit 
extensions  shall  immediately  end  and  we  may 
terminate  your  Account  without  further  notice 
to  you. We  can  do  this  if  you  make  any  false  or 
misleading  statements  on  your  requests  for  an 
advance,  if  you  die,  file  for  bankruptcy  or  if  any 
other creditor tries to seize your property.
If  your  required  minimum  payment  has  not 
been  received  within  60  days  of  the  due  date, 
any  balance,  including  a  balance  transfer  with 
a  promotional  rate,  will  increase  to  the  Penalty 
Annual  Percentage  Rate  (Penalty  APR).  See 
Section 10 below for details of the Penalty APR. If 
collection is necessary, you agree to pay all costs 
of collection, including attorney’s fees and court 
costs, in an amount not more than 25 percent of 
the balance due.
8. LATE PAYMENT FEES. You may be charged a 
late payment fee if the Minimum Payment Due is 
received 10 or more days past the due date1.
9. VARIABLE  RATES.  One  or  more  APRs  that 
apply  to  your  Account  may  vary  with  changes 
to  the  Prime  Rate,  which  means  your  rate  can 
increase.  We  calculate  the  APR  by  adding  a 
margin  to  the  Prime  Rate  published  in  The  Wall 
Street  Journal.  If  The  Wall  Street  Journal  stops 
publishing the Prime Rate, we will select a similar 
reference  rate  and  inform  you  on  your  billing 
statement  or  through  a  separate  notice.  The 
“Prime  Rate”  is  the  highest  (U.S.)  Prime  Rate 
published  in  the  Money  Rates  section  of  The 
Wall  Street  Journal.  A  margin  is  the  percentage 
we  add  to  the  Prime  Rate  to  calculate  the  APR. 
On the first Tuesday of the first full week of each 
month,  we  determine  what  the  Prime  Rate  is  as 
published in the Wall Street Journal. We then add 
a  margin  as  set  forth  in  the  Summary  of  Terms 
issued  with  your  Card  to  the  Prime  Rate  to  get 
the  APR  for  the  following  month¹.  If  the  APR 
increases, you will have to pay a higher periodic 
finance  charge  and  may  have  to  make  a  higher 
minimum payment.
10. PENALTY  ANNUAL  PERCENTAGE  RATE.  If 
your required minimum payment is not received 
within  60  days  of  the  due  date,  your  Account 
may be subject to change to a Penalty APR. The 
Penalty  APR  will  remain  in  place  until  you  make 
three  consecutive  payments  on  or  before  the 
date that each payment is due. In addition, your 
balance transfer rate for any outstanding balance 
transfer  amounts  will  increase  to  the  Penalty 
APR. After three consecutive months of on-time 
payments, the rates will be reduced to the rates 
that  applied  prior  to  the  increase,  unless  the 
temporary  promotional  rate  has  expired  or  the 
index for the variable rate has changed¹.

11.  PROMOTIONAL  ANNUAL 
PERCENTAGE 
RATE.  At  our  option,  a  special  promotional  rate 
may  be  offered  from  time  to  time.  The  specific 
terms  will  be  provided  at  the  time  of  the  offer. 
Generally,  the  promotional  APR  will  only  apply 
to  select  transactions  (i.e.  purchases  or  balance 
transfers)  during  the  promotional  period.  The 
APR rates for all other transactions, not outlined 
in  the  promotion  as  eligible  for  the  promotional 
APR,  will  remain  unchanged.  If  your  required 
minimum payment is not received within 60 days 
of  the  due  date,  any  promotional  APR  and  the 
periodic  rate  for  purchases,  cash  advances,  and 
balance transfers will increase to the Penalty APR 
until 3 consecutive payments are made on time.
12. CASH  AND  CASH-LIKE  TRANSACTIONS. 
The  following  transactions  will  be  treated  as 
cash  advances  when  conducted  with  your  Card, 
account  number,  checks  or  mobile  device:  any 
person  to  person  transfers  or  transfers  to  any 
PenFed or non-PenFed account, bill pay, overdraft 
protection, ATM or over the counter advances, the 
purchase  of  travelers  checks,  foreign  currency, 
money  orders,  bail  bonds,  cryptocurrency,  wire 
transfers,  lottery  tickets,  casino  gaming  chips, 

race track wagers or similar betting transactions; 
and any payment using a third party service.
13. ACCOUNT  CLOSURE.  You  or  anyone  jointly 
liable for the Account may terminate the Account 
at  any  time  by  notifying  us  orally  or  in  writing. 
However,  this  will  not  relieve  you  or  any  of  the 
other joint owners from liability for the repayment 
of  any  obligations  arising  from  the  use  of  the 
Account.  In  addition,  recurring  charges  from  a 
third  party  vendor/merchant  will  be  charged  to 
your  Account,  even  though  you  have  requested 
cancellation  from  PenFed.  You  must  cancel  the 
recurring  charge  with  the  third  party  vendor/
merchant.  Upon  receipt  of  your  notice,  we  may 
close  your  Account  or  suspend  your  Account 
privileges  at  any  time  without  prior  notice.  You 
must return all of the Cards to us upon request.
14. THIRD  PARTY  DISCLOSURE.  We  may 
disclose  information  to  third  parties,  including 
but  not  limited  to  credit  reporting  agencies  or 
merchants, about your Account in order to advise 
such  third  parties  of  the  existence  or  condition 
of  your  Account,  to  evaluate  your  current  credit 
worthiness, or as otherwise provided by law.
15. GRANT OF SECURITY INTEREST IN SHARES. 
To  protect  us  if  you  are  in  default  on  any  credit 
extended  or  cash  advanced  under  this  Account, 
you  have  granted  a  security  interest  in  all  of 
your  shares,  deposits,  payments  and  dividends 
which  may  be  received,  whether  held  jointly  or 
individually, up to the amount of your outstanding 
balance. The foregoing security interest includes 
the  right  to  apply  funds  available  to  you  in  any 
jointly  held  account  on  your  date  of  death.  This 
does  not  include  your  individual  retirement 
accounts  (IRA).  We  may  take  all  the  shares 
needed  by  us  to  repay  your  credit  extension 
or  cash  advance.  If  it  is  necessary  to  take  all  of 
your shares for the payment of this Account, you 
understand  your  membership  in  PenFed  may 
end.  Collateral  securing  other  loans  with  the 
credit union may also secure this loan.
Additional notice for Visa Secured cardholders: In 
consideration of PenFed’s issuing you a Card, you 
pledge  your  PenFed  Share  account  as  security 
for  this  line  of  credit.  To  protect  us  if  you  are  in 
default on any credit extended or cash advanced 
under this Account, you pledge all of your shares, 
deposits,  payments  and  dividends  which  may 
be  received,  whether  held  jointly  or  individually, 
up  to  the  amount  of  your  outstanding  balance. 
The  foregoing  pledge  includes  the  right  to 
apply  funds  available  to  you  in  any  jointly  held 
account  on  your  date  of  death.  This  does  not 
include  your 
individual  retirement  accounts 
individual retirement account (IRA). We may take 
all the shares needed by us to repay your credit 
extension  or  cash  advance.  If  it  is  necessary  to 
take  all  of  your  shares  for  the  payment  of  this 
Account,  you  understand  your  membership  in 
PenFed may end. Collateral securing other loans 
with the credit union may also secure this loan.
16. CARD  DISHONOR.  If  a  merchant  refuses  the 
Card, we will not have any liability or responsibility. 
No  cash  refund  will  be  made  to  or  accepted  by 
you with respect to any adjustment for goods or 
services purchased. All adjustments will be made 
by credit to your PenFed Account by a properly 
executed credit voucher issued by the merchant.

17. ILLEGAL,  EXCESSIVE,  OR  ABUSIVE  CARD 
USE.  You  agree  that  illegal  use  of  your  Card, 
or  behavior  deemed  by  us  to  be  excessive  or 
abusive  by  cardholders(s),  will  be  deemed  an 
action  of  default  and/or  breach  of  contract  and 
your Account and other related services may be 
terminated  at  our  discretion.  You  further  agree, 
should illegal, excessive, or abusive use occur, to 
waive any right to sue PenFed for such use or any 
activity directly or indirectly related to it. You also 
agree  to  indemnify  and  hold  PenFed  harmless 
from  any  suits  or  other  legal  action  or  liability, 
directly or indirectly, resulting from such use.
18. AUTHORIZED  USER.  You  may  request  us 
to  issue  a  Card  to  an  individual  who  has  no 
financial  responsibility  under  this  Agreement. 
An Authorized User has the same access to your 
Account  as  you  do,  subject  to  any  limitations 
we  may  impose.  An  Authorized  User  has  no 
authority  to  add  or  delete  cardholders,  request 

a  replacement  Card  or  terminate  or  modify  this 
Agreement.  You  may  terminate  an  Authorized 
User’s  authority  to  access  your  Account  at  any 
time.  To  do  this,  you  must  return  the  Card  to 
PenFed.  You  agree  that  you  are  responsible 
for  all  charges  and  cash  advances  made  by 
an  Authorized  User,  including  charges  made 
before  the  Card  is  returned,  recurring  charges, 
or  charges  made  without  the  use  of  the  Card 
initiated by the Authorized User after termination 
of the Authorized User’s access.
19. LIEN.  You  hereby  appoint  PenFed  as  your 
agent under a special power of attorney as well as 
give your express consent to enable us to charge 
against  any  balance  in  any  of  your  accounts, 
including accounts on which you are a joint owner, 
to  include  any  otherwise  statutorily  protected 
funds  that  may  not  otherwise  be  available  by 
legal  process,  to  pay  any  indebtedness  or  other 
outstanding  financial  obligation  owed  by  you  or 
any person who is listed as a joint owner on your 
accounts, including a deceased joint owner. This 
does not include your IRA or any other account 
for which this provision is not permitted. We may 
take  such  action  without  further  notice  to  you 
or any joint owner. In regard to those funds that 
have a statutory protection, you understand that 
you may withdraw the special power of attorney 
and  consent  for  PenFed  to  apply  such  funds  to 
pay  any  such  indebtedness  by  notifying  us  in 
writing.  If  your  agency  appointment  or  consent 
is  withdrawn,  PenFed  may,  in  its  sole  discretion, 
terminate any and all services that you have with 
the credit union.
20. ISSUANCE/USE  OF  CARD.  Upon  receipt 
of  the  Card(s),  you  and  all  other  cardholders 
agree  that  you  will  sign  the  signature  panel  on 
the  back  of  the  Card(s).  The  Card  remains  the 
property  of  Pentagon  Federal  Credit  Union  and 
may be revoked without notice at any time. The 
Card  must  be  surrendered  to  us  upon  demand 
or  revocation.  If  we  employ  an  agent  to  obtain 
the Card, your Account will be charged with any 
related  fees.  No  expired,  revoked  or  otherwise 
invalid Card shall be used to obtain or attempt to 
obtain credit. You will remain responsible to pay 
the  amount  you  owe  us  according  to  the  terms 
of  this  Agreement.  Cancellation  of  the  Account 
will also terminate any other products or services 
offered in conjunction with it. However, recurring 
charges from a third party vendor/merchant will 
be  charged  to  your  Account,  even  though  you 
have requested cancellation. You must cancel the 
recurring  charge  with  the  third  party  merchant/
vendor.
21. ISSUANCE/USE  OF  CHECKS.  If  we  issue  you 
checks, these checks are treated as cash advances 
when they are used and presented for payment. 
We  may  refuse  to  issue  or  reissue  and  may  also 
terminate,  limit  or  modify  the  use  of  the  checks 
without notice to you, and you agree to surrender 
the checks upon our demand or upon learning of 
our cancellation or withdrawal of the checks. Use 
of checks or other methods of access for kiting or 
similar activity is an action of default. The checks 
at  all  times  remain  the  property  of  PenFed  and 
we may repossess them without the use of court 
process.  All  of  the  terms  and  conditions  of  this 
Agreement apply to the use of the checks. Only 
check  blanks  and  other  methods  authorized  by 
PenFed  now  and  in  the  future  may  be  used  to 
obtain funds from your Account. If so authorized 
by PenFed, your use of a personal identification 
number  (PIN)  for  such  purpose  shall  constitute 
your signature. Paid checks become our property 
and  will  not  be  returned  to  you.  Copies  may  be 
provided, if requested, for a nominal fee for each 
item.  Should  we  decline  to  pay  any  check,  or  if 
you instruct us not to pay a check, PenFed shall 
not be liable, except for gross negligence, for any 
action it takes regarding payment or nonpayment 
of a check. If we decline to pay a check, a charge 
may  be  made  to  your  Account  in  the  amount 
indicated on our current Schedule of Service Fees 
brochure, which is available at any branch office, 
on  request,  or  at  PenFed.org.  You  will  not  date 
any check later than the date that you write it. If 
you  do  and  the  check  is  presented  for  payment 
before  its  date,  PenFed,  in  its  sole  discretion 
may  return  it  unpaid,  or  pay  it.  If  we  pay  it,  we 

will charge the Account. PenFed may, in its sole 
discretion,  pay  a  check  which  has  a  date  more 
than six months old.
22. ANNUAL FEE. You may be required to pay a 
nonrefundable  annual  fee  for  each  Account  you 
have with us for which a Card is issued. You will 
pay  only  one  annual  fee,  even  if  more  than  one 
Card  is  issued  for  your  Account.  The  fee  will  be 
charged  annually  to  your  Account.  This  charge 
will  appear  on  your  periodic  statement  for  the 
billing cycle when it first becomes effective¹.
23. FOREIGN  TRANSACTIONS.  Purchases  and 
cash advances made in foreign currencies will be 
debited  from  your  Account  in  U.S.  dollars.  The 
exchange rate between the transaction currency 
and  the  billing  currency  used  for  processing 
international  transactions  is  either  a  wholesale 
market rate or the government mandated rate in 
effect one day prior to the date processed by Visa 
and may include an international transaction fee.
24. DEBT  PROTECTION  PLAN.  Your  purchase 
of  the  Debt  Protection  Plan  (“Plan”)  is  optional. 
Whether  or  not  you  purchase  this  protection 
will  not  affect  your  application  for  credit  or  the 
terms of any existing credit agreement you have 
with PenFed. If you do purchase Debt Protection, 
you may cancel it at any time by notifying us in 
writing.  You  understand  that  you  may  rescind 
this plan within 30 days after the date your Debt 
Protection  becomes  effective.  If  you  rescind, 
any  premiums  you  have  already  paid  will  be 
credited to your Account. We can terminate this 
Agreement by giving you notice at least 30 days 
in  advance  of  the  termination.  The  premium, 
method of calculation and assessment are subject 
to change. If these terms change, we will provide 
written notice before the change goes into effect. 
Premiums will accrue on a daily basis and will be 
billed to your Account monthly. Complete details 
of  this  optional  Debt  Protection  are  included  in 
The  Debt  Protection  Plan  Program  Agreement 
which you will receive upon enrollment.
25. ASSIGNABILITY  OF  ACCOUNT.  You  agree 
that  PenFed  may  at  any  time  sell,  transfer  or 
assign your Account.
26. LOST/STOLEN  CARD.  You  are  responsible 
for  the  possession  and  use  of  the  Card  and 
must  maintain  the  confidentiality  of  the  PIN  we 
may assign you. You will notify us at once if you 
believe  your  Card  has  been  lost  or  stolen,  or  if 
you  have  reason  to  believe  the  Card  is  being 
used  without  your  permission.  You  may  notify 
us  by  calling  800-247-5626  or  402-399-3600 
collect from overseas, or by writing to us at Card 
Services,  Pentagon  Federal  Credit  Union,  Box 
456, Alexandria, VA 22313-0456.
27. LIABILITY FOR UNAUTHORIZED USE. If your 
statement  has  an  error  or  a  charge  you  did  not 
authorize,  you  must  tell  us  in  writing  within  60 
days  after  you  get  that  statement.  You  must 
follow  all  instructions  on  that  statement.  If  we 
find  no  error  after  investigation,  you  owe  us  the 
original amount plus applicable interest and fees. 
You are liable for all authorized use of any Card 
issued  under  the  Agreement  regardless  of  the 
credit  limit  or  the  party  using  it.  You  agree  to 
notify us immediately by calling 800-247-5626 or 
402-399-3600  collect  from  overseas,  or  writing 
to  us  at  Card  Services,  Pentagon  Federal  Credit 
Union,  Box  456,  Alexandria,  VA  22313-0456  if 
you suspect unauthorized use of the Card, and to 
cooperate with us in the recovery of any amounts 
advanced  based  on  unauthorized  use.  You  will 
not be liable for any unauthorized use of the Card.
28. STATEMENTS. We will bill you monthly, on a 
date selected by us, for amounts due under this 
Agreement.  If  you  elect  to  receive  your  credit 
card  statement  electronically,  you  will  receive 
an  email  alerting  you  when  your  statement  is 
ready  to  be  viewed  online.  There  may  be  a  $1 
fee  for  each  paper  statement  received¹.  Failure 
to  receive  a  monthly  statement  or  electronic 
statement notification does not relieve you from 
making  any  required  minimum  payment.  Upon 
receipt  of  each  periodic  statement,  you  should 
examine  it  and  immediately  notify  us  in  writing 
of  any  transaction  you  believe  to  be  in  error.  If 
your  Account  is  a  joint  account,  we  can  send 

statements  and  notices  to  either  of  you.  You 
agree to notify us promptly of any change in your 
name, address, or email address.
29. PAYMENT  SKIP  OPTION.  At  our  option,  we 
may  provide  for  a  payment  skip  option,  which 
means that you may be allowed to skip making the 
minimum  periodic  payment  for  specified  billing 
cycles.  If  you  accept  this  payment  skip  option, 
we  will  continue  to  apply  the  finance  charge  as 
disclosed  above,  but  no  late  payment  fees  will 
apply  to  the  skipped  payment.  For  the  billing 
cycle following a skipped payment, all the terms 
and  conditions  of  this  Agreement  (including 
minimum  periodic  payment  and  applicable  late 
payment fees) will continue to apply.
30. OTHER  AGREEMENTS.  All  the  terms  and 
conditions  of  any  other  agreement  between  us 
and you and/or any other institution that is part of 
a  network  of  automated  teller  machines  (ATMs) 
in which we participate, and any applicable rules 
and  regulations,  also  apply  to  use  of  the  Card. 
There  may  be  minimum  and/or  maximum  limits 
on the amount of a cash advance dispensed from 
electronic  terminals,  which  accept  the  Card.  All 
of  the  transactions  made  by  electronic  means 
are subject to verification by us, and any checks 
or  other  items  deposited  for  collection  may  be 
deemed to be received and any other transaction 
may  be  deemed  to  occur  on  our  next  business 
day.  You  understand  that  transactions  may  be 
limited in some areas.
You  agree  that  we  do  not  waive  our  rights 
under  this  Agreement  if  we  fail  to  assert  them. 
The  Agreement  binds  and  benefits  us  and  our 
successors  and  assigns  and  binds  you,  your 
estate and your personal representatives.
31. APPLICABLE  LAW.  This  Agreement  and  your 
Card and Additional Cards, and all questions about 
their  legality,  enforceability  and  interpretation, 
are governed by the laws of the Commonwealth 
of Virginia, USA.
32. MILITARY  LENDING  ACT.  Federal 
law 
provides  important  protections  to  members  of 
the Armed Forces and their dependents relating 
to  extensions  of  consumer  credit.  In  general, 
the cost of consumer credit to a member of the 
Armed Forces and his or her dependent may not 
exceed an annual percentage rate of 36 percent. 
This rate must include, as applicable to the credit 
transaction  or  account:  The  cost  associated 
with credit insurance premium; fees for ancillary 
products  sold  in  connection  with  the  credit 
transaction;  any  application  fee  charged  (other 
than certain applications fees for specified credit 
transactions  or  accounts);  and  any  participation 
fee charged (other than certain participation fees 
for a credit card account). For more information, 
please contact PenFed at 800-247-5626.
YOUR  BILLING  RIGHTS  (Keep  this  notice  for 
future use.) This notice tells you about your rights 
and  our  responsibilities  under  the  Fair  Credit 
Billing Act.

WHAT TO DO IF YOU FIND A MISTAKE ON YOUR 
STATEMENT. If you think there is an error on your 
statement, write to us at: Card Services, Pentagon 
Federal  Credit  Union,  Box  456,  Alexandria,  VA 
22313-0456.  You  may  also  contact  us  on  the 
Web  via  our  Secure  Online  Message  Center  at: 
PenFed.org. In your letter, give us the following 
information:
•  Account  information:  Your  name  and  account 

number.

•  Dollar  amount:  The  dollar  amount  of  the 

suspected error.

•  Description of problem: If you think there is an 
error on your bill, describe what you believe is 
wrong and why you believe it is a mistake.

You must contact us:
•  Within  60  days  after  the  error  appeared  on 

your statement.

•  At least 3 business days before an automated 
payment  is  scheduled,  if  you  want  to  stop 
payment on the amount you think is wrong.
You  must  notify  us  of  any  potential  errors  in 
writing  or  electronically.  You  may  call  us,  but  if 
you  do,  we  are  not  required  to  investigate  any 
potential  errors  and  you  may  have  to  pay  the 
amount in question.

WHAT  WILL  HAPPEN  AFTER  WE  RECEIVE 
YOUR LETTER. When we receive your letter, we 
must do two things:
1.  Within  30  days  of  receiving  your  letter,  we 
must tell you that we received your letter. We 
will  also  tell  you  if  we  have  already  corrected 
the error.

2. Within  90  days  of  receiving  your  letter,  we 
must either correct the error or explain to you 
why we believe the bill is correct.

While  we  investigate  whether  or  not  there  has 
been an error:
•  We  cannot  try  to  collect  the  amount  in 
question,  or  report  you  as  delinquent  on  that 
amount.

•  The  charge  in  question  may  remain  on  your 
statement, and we may continue to charge you 
interest on that amount.

•  While  you  do  not  have  to  pay  the  amount  in 
question, you are responsible for the remainder 
of your balance.

•  We can apply any unpaid amount against your 
credit  limit.  After  we  finish  our  investigation, 
one of two things will happen:

•  If we made a mistake: You will not have to pay 
the amount in question or any interest or other 
fees related to that amount.

•  If we do not believe there was a mistake: You 
will have to pay the amount in question, along 
with applicable interest and fees. We will send 
you  a  statement  of  the  amount  you  owe  and 
the date payment is due. We may then report 
you as delinquent if you do not pay the amount 
we think you owe.

If  you  receive  our  explanation  but  still  believe 
your  bill  is  wrong,  you  must  write  to  us  within 
10  days  telling  us  that  you  still  refuse  to  pay.  If 
you  do  so,  we  cannot  report  you  as  delinquent 
without  also  reporting  that  you  are  questioning 
your  bill.  We  must  tell  you  the  name  of  anyone 
to  whom  we  reported  you  as  delinquent,  and 
we must let those organizations know when the 
matter has been settled between us. If we do not 
follow all the rules above, you do not have to pay 
the first $50 of the amount you question even if 
your bill is correct.

YOUR RIGHTS IF YOU ARE DISSATISFIED WITH 
YOUR  CREDIT  CARD  PURCHASES.  If  you  are 
dissatisfied  with  the  goods  or  services  that  you 
have  purchased  with  your  credit  card  and  you 
have  tried  in  good  faith  to  correct  the  problem 
with the merchant, you may have the right not to 
pay the remaining amount due on the purchase. 
To use this right, all of the following must be true:
1.  The  purchase  must  have  been  made  in  your 
home state or within 100 miles of your current 
mailing  address,  and  the  purchase  price  must 
have  been  more  than  $50.  (Note:  Neither  of 
these is necessary if your purchase was based 
on an advertisement we mailed to you, or if we 
own the company that sold you the goods or 
services.)

2. You  must  have  used  your  credit  card  for  the 
purchase. Purchases made with cash advances 
from  an  ATM  or  with  a  check  that  accesses 
your credit card account do not qualify.

3. You  must  not  yet  have  fully  paid  for  the 

purchase.

If  all  of  the  criteria  above  are  met  and  you  are 
still  dissatisfied  with  the  purchase,  contact  us 
in  writing  or  electronically  at:  Card  Services, 
Pentagon  Federal  Credit  Union,  Box  456, 
Alexandria, VA 22313-0456, or online at PenFed.
org. While we investigate, the same rules apply to 
the  disputed  amount  as  discussed  above.  After 
we  finish  our  investigation,  we  will  tell  you  our 
decision.  At  that  point,  if  we  think  you  owe  an 
amount and you do not pay, we may report you 
as delinquent. 

____________________________________________________________________________________________
¹ Refer to the Summary of Terms issued with your Card

Information  about  this  Card  is  accurate  as  of 
March  2020  but  may  have  changed  since  then. 
To find out what may have changed, please go to 
PenFed.org or call 800-247-5626. 

Form 1203 (03/20) ©2020 PenFed