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tisement 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.

AMA PENFED VISA PROMISE

Cardholder Agreement  
and Disclosure Statement 

Information about this card is accurate as of April 2014 but may have changed since then. To find 
out what may have changed, please go to PenFed.org or call 866-386-7254.

Form 1273-AMA 

          4/14           POD            FDR M-110942  

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. An Authorized User is an indi-
vidual receiving a Card, but who has no responsibility for payment of the Account. 
The words “you”, “your” and “cardholder” mean each person, jointly and individu-
ally 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. Unless otherwise stated, 
“Account” means your Card account with us.

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 will 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. 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. 

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 ap-
ply  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.) 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 condi-
tions 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 Agree-
ment 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 per-
son, 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.

5. FINANCE CHARGES  WILL  BE  IMPOSED  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 bal-
ance 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 state-
ment 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)  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 (determined by including new 
cash advances and deducting any payments or credits and excluding any unpaid fi-
nance charge) outstanding each day during the billing cycle, divided by the number 
of days in the billing cycle. 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.

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 mon-
ey 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 pay-
ment 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 “re-
turned payment” on Pentagon Federal’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  payments  will  be  applied  first  to  the  card  bal-
ance  bearing  the  highest  rate  of  interest,  then  to  each  successive  balance  bear-
ing  the  next  highest  rate  of  interest  until  the  payment  is  exhausted.  You  un-
derstand  and  agree  that  payments  will  be  applied  in  the  following  order:  (1) 
finance  charge;  (2)  credit  life  fee  (if  any);  (3)  previous  balance  cash  advances; 
(4)  previous  balance  purchases;  (5)  new  cash  advances;  and  (6)  new  purchases.

 7. DEFAULT. You will be in default if you fail to make any payment on time, if you 
exceed the credit limit established for the Account, 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 obliga-

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tion 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 mis-
leading statements on your requests for an advance, if you die, file for bankruptcy or 
if any other creditor tries to seize your property. 

If collection is necessary, you agree to pay all costs of collection, including attor-
ney’s fees and court costs, in an amount not more than 25 percent of the balance due.

8. 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 simi-
lar 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. Twice a year, on the Tuesday in the last full 
week before January 1 and the Tuesday in the last full week before July 1, we de-
termine what the Prime Rate is, as published in the Wall Street Journal. We then 
add a margin of 6.74% to the Prime Rate to get the APR. If the APR increases, you 
will have to pay a higher periodic finance charge and may have to make a higher 
minimum payment. 

9.  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 ap-
ply  to  select  transactions  (i.e.  purchases  or  balance  transfers)  during  the  pro-
motional period. The APR rates for all other transactions, not outlined in the 
promotion as eligible for the promotional APR, will remain unchanged. We may 
end your promotional Balance Transfer APR if we do not receive your payment 
within 60 days of the due date.

10. ACCOUNT CLOSURE. You or anyone jointly liable for the Account may termi-
nate 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 Ac-
count or suspend your account privileges at any time without prior notice. You must 
return all of the Cards to us upon request.

11.  THIRD  PARTY  DISCLOSURE.  We  may  disclose  information  to  third  parties 
about your account in order to advise third parties, such as credit reporting agencies 
or merchants of the existence or condition of your Account, to evaluate your current 
credit worthiness or as otherwise provided by law. 

12. 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 out-
standing 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 account (IRA). We may take all the shares needed by us to re-
pay 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. 

13. 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.

harmless from any suits or other legal action or liability, directly or indirectly, result-
ing from such illegal use. 

15. 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 replace-
ment 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 Au-
thorized User after termination of the Authorized User’s access.

16. 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 de-
ceased 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 Pen-
Fed 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.

17. ISSUANCE/USE OF CARD. Upon receipt of the Card(s) you and all other card-
holders 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. 

18. 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 learn-
ing 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. 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. 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.

14. ILLEGAL CARD USE. You agree that illegal use of your Card 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 use occur, to waive any right to sue PenFed for such illegal use or any activ-
ity directly or indirectly related to it. You also agree to indemnify and hold PenFed 

19. FOREIGN TRANSACTIONS. Purchases and cash advances made in foreign cur-
rencies 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.

20.  CREDIT  INSURANCE  PLAN.  Your  purchase  of  the  Credit  Insurance  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 Credit Insurance you may cancel it at any time by notify-
ing us in writing. You understand that you may rescind this plan within 30 days after 
the date your Credit Insurance 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 Credit Insurance are included in The Credit Insurance Plan Program Agree-
ment which you will receive upon enrollment.

21. ASSIGNABILITY OF ACCOUNT. You agree that PenFed may at any time sell, 
transfer or assign your account.

22.  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 800-556-LOST 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. 

23.  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 regard-
less of the credit limit or the party using it. You agree to notify us immediately by 
calling  800-556-LOST  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.

24. STATEMENTS. We will bill you monthly, on a date selected by us, for amounts 
due  under  this  Agreement.  As  a  condition  of  the  issuance  of  this  card,  you  agree 
to receive your credit card statement(s) electronically. You further understand and 
agree that if you currently have any other PenFed credit cards, you will also receive 
those statements electronically. You will receive an email alerting you when your 
statement  is  ready  to  be  viewed  online.  Failure  to  receive  a  monthly  statement  or 
electronic statement notification does not relieve you from making any required min-
imum 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.

25. 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  peri-
odic  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  pay-
ment  fees  will  apply  to  the  skipped  payment.  For  the  billing  cycle  following  a 
skipped payment, all the terms and conditions of this Agreement (including mini-
mum  periodic  payment  and  applicable  late  payment  fees)  will  continue  to  apply.

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. 

27. 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.

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 let-

ter. 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 inter-

est 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. 

26. 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 regula-
tions, 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. 

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 adver-