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Petal Credit Cards Review

Petal Credit Cards Review

*Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated Nov 11, 2020. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

Whether you need to repair credit that’s less than perfect or build credit from scratch, Petal can help you make progress toward your financial goal.

The Petal® 1 "No Annual Fee" Visa® Credit Card, released in October 2020, helps people with less-than-stellar credit rebuild their credit history. Meanwhile, the original Petal card has been rebranded as the Petal® 2 "Cash Back, No Fees" Visa® Credit Card, continuing the company’s mission of helping people with no credit or limited credit history establish and build good credit.

We review the two Petal credit cards and offer up a competing card to compare.

Who are the Petal credit cards best for?

The Petal cards differ from competing credit cards designed for those with limited or no credit history by using a “Cash Score” in determining eligibility for new applicants. This score is derived through  analysis of banking and bill payment patterns, rather than relying on traditional credit scores to determine creditworthiness.

For example, applicants link a bank account, which is then fed into an algorithm to review banking transaction history, money earned and money spent each month, as well as bills paid.

Plus, you can check before actually applying to see if you’re preapproved for a Petal card, which won’t impact your credit score. However, you will be asked to provide your Social Security Number, annual income and housing costs, as well as other personal information, including your phone number, employment status and income.

While many credit cards for beginners are secured cards, which often require a security deposit in the amount of your credit limit, the Petal cards are unsecured (meaning no deposit is required).

Plus, both Petal cards report to the three major credit bureaus — Equifax, Experian and TransUnion — so if you keep utilization low and pay on time across all your credit cards and loans you may have, you can build excellent credit using either card.

How to Check Your Credit Score When You’ve Never Done It Before

Compare the Petal credit cards

While both Petal cards are aimed at helping consumers build credit, they’re designed for applicants with different financial needs.

If you’ve had credit before and your credit score has suffered because of missteps or a difficult financial situation, the Petal 1 Credit Card is more suited to helping you improve your score.

Meanwhile, if you’ve never had credit before or if you have a limited credit history, the Petal 2 Credit Card is a good card to flesh out your credit file with.

Here’s how the two cards compare:

Petal 1 Credit Card vs. Petal 2 Credit Card

 Petal 1 Credit CardPetal 2 Credit Card
Credit neededLimited/Poor/AverageLimited/Average/Good
Annual fee$0$0
Rewards Earn 2% to 10% cash back from select merchants. Earn 1% cash back on eligible purchases right away, and 2% to 10% cash back from select merchants
Regular purchase APRvariable aprs between 19.99- 29.49 variable aprs between 12.99- 26.99

If you are able to meet Petal’s criteria for approval, both cards offer a good opportunity to build your credit profile without having to resort to a secured card that requires a deposit.

Cardholders who use the Petal 1 Credit Card responsibly may soon be able to request a product change to the Petal 2 Credit Card. However, when this option is available, issuers often need to see at least six months of positive history before cardholders are eligible for any change in card or pricing.

Petal 1 Credit Card pros and cons

  • Earn 2% to 10% cash back from select merchants

  • Cash flow technology may help applicants without credit history get approved. Petal reports to all 3 major credit bureaus

  • $500 - $5,000 credit limits. No deposits required.

Highlights
  • $0 Annual Fee
  • 2% - 10% cash back from select merchants
  • $500-$5,000 credit limits
  • Variable APRs 19.99-29.49% APR
  • No annual or international transaction fees. Late and returned payment fees may apply
  • Build credit alongside tens of thousands of Petal Card members
  • Cash flow technology may help applicants without credit history get approved
  • Petal's mobile app makes it easy to manage your money, track your spending, and automate payments
  • See if you're pre-approved within minutes without impacting your credit score
  • Petal reports to all 3 major credit bureaus
  • No deposits required
  • Card issued by WebBank, Member FDIC

See additional details for Petal® 1 "No Annual Fee" Visa® Credit Card

More Info

Pros

Rewards. Earn 2% to 10% cash back from select merchants. While you won’t earn cash back on purchases outside of selected merchants, it’s a nice feature that this card offers some form of reward. Many cards for consumers who need to rebuild credit don’t offer rewards at all.

No annual fee. Petal does not have an annual fee, so you don’t have to pay just to carry it.

No foreign transaction fee. You can rest easy when traveling outside the United States with the Petal 1 Credit Card, because its foreign transaction fee is none.

Credit limits between $500 and $5,000. For a card aimed at people who are new to or rebuilding their credit, this is a potentially high credit limit.

Cons

High APR. The Petal 1 Credit Card’s interest rate is variable aprs between 19.99- 29.49 .

Has some fees. While the Petal 2 Credit Card doesn’t have any fees, the Petal 1 Credit Card does. You’ll incur a late fee of up to $29 the first time you pay late, and up to $40 for the next time you pay late. There’s also a fee of up to $29 for bounced payments. However, if you pay on time and in full every month, you can avoid late fees, as well as interest charges.

Petal 2 Credit Card pros and cons

  • Earn 1% cash back on eligible purchases right away, and 2% to 10% cash back from select merchants

  • Those with thin to no credit file can be accepted based on Cash Flow underwriting alone. Petal reports to all 3 major credit bureaus.

  • No late fee, foreign transaction fee, or annual fee.

Highlights
  • No fees whatsoever. No late fee, international fee, annual fee, or any-other-kind-of-fee, fee.
  • Up to 1.5% cash back after making 12 on-time monthly payments
  • 1% cash back on eligible purchases right away
  • 2% - 10% cash back from select merchants
  • $500-$10,000 credit limits
  • Variable APRs 12.99%-26.99%
  • Build credit alongside tens of thousands of Petal Card members
  • Cash flow technology may help applicants without credit history get approved
  • Petal's mobile app makes it easy to manage your money, track your spending, and automate payments
  • See if you're pre-approved within minutes without impacting your credit score
  • Petal reports to all 3 major credit bureaus
  • No deposits required
  • Card issued by WebBank, Member FDIC

See additional details for Petal® 2 "Cash Back, No Fees" Visa® Credit Card

More Info

Pros

Rewards. Earn 1% cash back on eligible purchases right away, and 2% to 10% cash back from select merchants

No fees whatsoever. The annual fee is $0, the foreign transaction fee is none and there are no late fees  — or any other kind of fees. Note that even though there isn’t a late fee, you should always pay on time, as late payments are still reported to the credit bureaus and payment history accounts for 35% of your FICO Score.

Credit limits between $500 and $10,000. This is a potentially high credit limit maximum — especially considering the card is aimed at people who are new to credit — and is based on Petal’s analysis of your creditworthiness once you apply.

Reasonable APR range. The interest rate is variable aprs between 12.99- 26.99. We recommend paying off your card in full every month, but if you occasionally need to roll over a balance, having a card with a lower APR can save you money. The lower end of the Petal 2’s APR range is very competitive compared to many other cards, though you should know there’s no guarantee you’ll qualify for the lower rate until you apply.

Best Low Interest Credit Cards

Cons

Low rewards rate at first. This card offers the potential to earn up to 1.5% cash back after making 12 on-time monthly payments, a competitive rate for flat-rate cashback cards. However, it starts you out at just 1% back, which is low compared with many cashback cards.

Alternative card for building credit

If you’re not sure that either the Petal 1 Credit Card or the Petal 2 Credit Card is the best credit card to help you build credit, the AvantCard Credit Card is available to consumers with fair/limited/bad/poor credit, and like the Petal cards, doesn’t require a deposit.

  • Fast and easy application process

  • No deposit required and no penalty APR

  • 25.99% Variable

Highlights
  • Fast and easy application process
  • No deposit required
  • No hidden fees
  • No penalty APR
  • Report to all three major credit bureaus
  • Zero fraud liability for unauthorized charges
  • Avant branded credit products are issued by WebBank, member FDIC
  • Disclosure: If you are charged interest, the charge will be no less than $1.00

See additional details for AvantCard Credit Card

More Info

Petal 1 and Petal 2 vs. the AvantCard Credit Card

 Petal 1 Credit CardPetal 2 Credit CardAvantCard Credit Card
Credit neededLimited/Poor/AverageLimited/Average/GoodFair/Limited/Bad/Poor
Annual fee$0$0$39
Foreign transaction feeNoneNoneNone
Late feesUp to $29 for the first late payment and up to $40 for subsequent.NoneUp to $39.
RewardsEarn 2% to 10% cash back from select merchants.Earn 1% cash back on eligible purchases right away, and 2% to 10% cash back from select merchantsNone
Regular purchase APRvariable aprs between 19.99- 29.49 variable aprs between 12.99- 26.9925.99% variable

Unlike the Petal credit cards, the AvantCard Credit Card charges an annual fee and doesn’t offer rewards. It also has a single high APR, whereas both Petal cards have an APR range.

However, for those who have fair/limited/bad/poor credit and think they might be denied for a Petal card, the AvantCard Credit Card is a solid no-frills credit card that doesn’t require a security deposit and reports your usage to the credit bureaus.

Be aware, however, that consumers living in Colorado, Iowa, Vermont, West Virginia or Wisconsin can’t get the AvantCard Credit Card. Both the Petal credit cards and the AvantCard Credit Card are issued by WebBank.

For more recommendations, see our list of best credit cards for people with no credit.


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