Whenever a credit card issuer switches a rewards program from giving cash back to a points-based system, it’s usually a sign that the program is going to get worse eventually. That’s because there are more ways to save the issuer money by making your points worth less, without making it completely obvious to the consumer. So, back in December 2011 when PenFed announced a points-based rewards card and simultaneously encouraged consumers to switch to it, the writing was on the wall.

Back then, PenFed offered 25,000 points, redeemable for a $250 Visa gift card, for switching their cash-back Platinum Visa Cash Rewards card to the points-based PenFed Platinum Rewards card. Since they were also simultaneously downgrading the cash-back card so that it earned 5% on gas purchases, but only 0.25% (down from 1%) on all other purchases, it proved a strong incentive to switch, as the points card earned 5 points per dollar on gas, 3 points at supermarkets and 1 point per dollar on everything else.

At the time, you could redeem points for Visa prepaid cards at a 1 point to 1 cent exchange rate. (5,000 points = $50 Visa prepaid card, 10,000 points = $100 Visa prepaid card, 25,000 points = $250 Visa prepaid card). Today, that is still the case.

However, some users at FW reported that sometime yesterday, changes were made on the redemption website that made your points worth a lot less–$50 Visa prepaid cards required 6,100 points, $100 Visa prepaid cards were 12,000 points and $250 Visa prepaid cards were 29,600 points.

Those changes seem to have been temporarily reverted for now, so that you are able to once again redeem your points at a 1 point to 1 cent exchange rate. Since it seems likely that the website changes were simply made prematurely, it seems wise to cash out your points as soon as possible under the current rates.

It seems evident that devaluation is coming. It’s now just a matter of time–and unfortunately, we probably won’t have long to wait.

Update 8/19: According to this post on FW, it has been confirmed by PenFed that the changes in the redemption schedule will take place on August 23, 2013. The new redemption rate will be 1 point for 0.82 cents on a prepaid card.