Trying to build credit from scratch isn’t something that many banks make easy to do. Many times the best option for those with little or no credit history is to get a secured credit card.
But secured cards require a security deposit that takes money out of your pocket. They often have an annual fee and if you carry a balance those interest charges will skyrocket your bill.
Fortunately, there are companies like Petal Card that offer options to help those with limited credit, build their credit score and earn cashback, with no security deposit required.
Sound too good to be true? Let’s look into this credit card company and see if they’re all they claim to be in this Petal Card review!
What is Petal Card?
You are probably family with other credit cards like American Express and Citi that are offered by credit card companies in their namesake. Many of their credit cards offer rich rewards and other benefits but their cards are generally meant for people who already have an established credit history.
Credit cards are not accessible to many people, especially credit newbies and those with bad credit. Petal was founded in 2016 by four founders, including their CEO Jason Gross.
Their goal is to provide an option for those with a limited credit history or who don’t have high credit scores to get a credit card.
Your Credit History and Credit Score
Traditionally, credit card companies will base their decision to approve your application on your FICO credit score and credit history that’s found on your credit report.
Petal determines a person’s creditworthiness using a more holistic and comprehensive approach. They place a heavier focus on a person’s cash flow instead.
This allows them to provide a more accurate assessment of whether an applicant has the ability to repay. The hope is that by using this approach, they can approve more applicants for a Petal credit card.
Petal Card Products
Petal Card offers two credit card products currently: The Petal 1 and Petal 2. Let’s talk about each of them now.
Petal 1 Visa Credit Card
- Annual fee $0 (late and returned payment fees may apply)
- Credit limits start at $500-$5,000
- Annual Percentage Rate between 19.99% 0 29.49%
- 2% to 10% cash back at select merchants
- No foreign transaction fee
- Help with avoiding late fees by turning on AutoPay
- No balance transfer or purchase intro APR offers
- No sign-up bonus offers
- No pently APR
The other perks of the Petal 1 include those that are offered by a traditional Visa credit card. Keep in mind that these Visa benefits may change or vary, but the Petal 1 currently offers:
- Cardholder inquiry services
- Zero liability fraud protection
- Pay-per-use 24/7 roadside dispatch assistance
- Lost/stolen card reporting
- Emergency card replacement and cash disbursement
- Visa Local Offers with Uber
Increase your Credit Limit
Petal offers what they call its Leap program which allows you to earn the chance to get a higher credit limit. To do this, you must qualify by making on-time payments for 6 months and maintaining your credit score within a certain range.
Petal 2 Visa Credit Card
- Annual fee $0
- No other fees (late or return fees)
- Credit limits starting at $500-$10,000
- Annual Percentage Rate between 12.99%-26.99%
- 1% – 1.5% cash back (and other others)
- No foreign transaction fees
- No balance transfer or purchase intro APR offers
- No cash back bonuses
- No penalty APR
Like the Petal 1 Visa Credit Card, there are additional benefits offered by the network Visa. Similarly, these benefits may change or vary. The Petal 2 Visa credit card currently offers the following benefits:
- Auto rental collision insurance
- Roadside dispatch
- Emergency card replacement
- Emergency cash advance
- Zero liability protection
Cash back, No Fees
The two stand-out features of the Petal 2 cash back card is that you automatically earn 1% on all your eligible purchases. If you pay your monthly payment on time, you can earn up to 1.5% in cash back.
The cash back, no fees Petal 2 card also won’t hit you with a late or return payment fee if you happen to miss a payment.
Petal Card Rewards Program
Petal 1 Cash Back no Fees Visa
The Petal 1 Visa credit card doesn’t have a consistent cash back rewards program. The Petal Perks program may offer you the chance to earn cash back on eligible purchases from certain merchants.
Earning Cash Back
Similar to Amex Offers and other card-linked offer programs, you’re automatically enrolled in each Petal Perks offer. This is a nice feature others typically require that you active the offer.
Your earning could be anywhere from 2% to 10% on eligible purchases at select merchants. The rewards are in the form of what’s called “cash back points.”
Each of these points are earned as a percentage of a dollar. Hence each cash back point is equivalent to 1 cent.
Each offer has its own terms and time frames, so you might not always have a consistent opportunity to earn rewards with this no fees Visa credit card.
How to Redeem Cash Back
These “cash back points’ can be redeemed when you’ve accumulated at least $20. When redeeming cash back, you can apply it as a statement credit, check, or direct deposit.
Petal 2 Cash Back no Fees Visa
The Petal 2 cash back no fees Visa allows cardholders to earn 1% automatically on all eligible purchases. Additionally, you can increase this to 1.5% on eligible purchases when you make 12 on-time payments.
You can also take advantage of the Petal Perks offers that are available on the Petal 1 no fees Visa credit card. That gives you the ability to earn anywhere from 2% to 10% on eligible purchases with select merchants.
Earning Cash Back
Once you have signed up for the Petal 2 cash back card, you immediately start earning 1% on your eligible purchases. After making 6 on-time payments, that gets bumped up to 1.25%.
With 12 on-time payments, this again increases to 1.5%.
Petal Perks offers are automatically loaded into your Petal account so you don’t have to sign up for them. You can check which merchants are currently participating by sharing your location with the Petal app.
There, you will be able to see which nearby businesses are offering cash back and at what amounts.
How to Redeem Cash Back
On the Petal 2 no fees Visa credit card, your eligible purchases are automatically deposited into your Cash Back Wallet during the next bill cycle. Your cash back points can be redeemed for a statement credit that can be up to your current balance.
When you have over $20 in cash back rewards available to redeem, you can also request a check or ACH transfer to your bank account.
Petal Card Pros
Underwriting can be more favorable to those seeking to build your credit
Credit scores like FICO aren’t going to be the determining factor in whether you get approved. Petal uses its cash flow technology to expand access to its credit cards to those who generally wouldn’t be approved.
Petal Card uses an algorithm that analyzes your income, savings, and spending to help it make underwriting decisions. Your bank account needs to be linked for Petal to receive this information.
If you’re worried about security, Petal does not keep your login credentials. Additionally, they only have read-only access to your bank account.
This makes it great for those who don’t have a lot of credit history to get a no fee, Visa credit card.
No Security Deposit
With either Visa credit card with Petal, you don’t have to come up with a security deposit to open an account. Many of the options for credit newbies are secured cards that require this up-front money.
Low Rates and Fees
For those who are looking to build credit for the first time, the Petal Visa credit cards have lower rates and fees than you would find on a secured card. There’s no annual fee, foreign transaction fees, and with the Petal 2 Visa, you can even get your late payment fee or return fee waived.
Both of these cash back no fees Visa cards will report your monthly payments to all three major credit bureaus. If you have the Petal 2 cash back card, you can also increase your cash back rewards by paying on-time consistenly.
Using Petal’s mobile app, you can also track your credit score for free. This allows you to track your progress and get a sense of what’s happening with your credit.
Higher Credit Limit
The initial credit limit on the Petal 1 Visa is between $500 to $5,000. That’s eye-catching for a starter, unsecured card. What’s more, is that you can get a credit limit increase by building credit.
By making your monthly payments timely and keeping within the recommended credit score range, you can bump up your credit limit.
The nice thing about a higher limit is it’s easier to keep your credit utilization ratio. Your utilization ratio is a major factor in what makes up your credit scores.
Cash Back Rewards
As far as starter credit cards, there are few that offer cash back, no fees Visa products. The Petal 2 Visa will evolve your rewards as you are building credit. Make your payemtns on-time for six months straight will increase your cash back to 1.25%.
Once you’ve made 12 on-time payments, your cash back will increase to 1.5%. In addition to receiving this perk for no missed payments, there is no limit to the cash back rewards that you can earn. As long as your account remains in good standing, your rewards won’t expire either.
No Foreign Transaction Fees
Either of the Petal Visa cards makes a good travel companion. Since there is no foreign transaction fee, when you travel aboard, you won’t get dinged at an extra 1% to 3% for every transaction.
Since they are both use the Visa network you also shouldn’t have any problem finding merchants who accept it when traveling.
Petal Card Cons
No Intro APR
It’s great that the Petal cash back no fees cards offer many features that typically aren’t available to people who are working on building their credit score from scratch. However, it neither the Petal 1 or Petal 2 cash back cards offer a low or 0% intro rate on APR.
No Balance Transfers or Cash Advances
If you want to transfer a balance or make a cash advance using these no annual fee Visa credit cards, you will be sorely disappointed. Even the more robust Petal 2 visa credit card is missing these features.
Approval Odds are still Greater on a Secured card
An applicants’ credit approval would still be better on a secured credit card over the Petal 1 or Petal 2 Visa credit cards. That’s because those who have hurt their credit score through situations like declaring bankruptcy or have a track record of missing their monthly payments have lower approval odds.
Even if you have decent or fair credit, your approval odds aren’t assured. Since Petal uses algorithms that look at a variety of personal data, having a middle of the range credit score may not be enough to get you approved.
Many unsecured credit cards offers bonus cash as an incentive for signing up. Even the higher tier Petal 2 cash back does not offer bonus rewards for signing up. So these aren’t the cash back no fees Visa cards for you if that’s what you’re looking for.
Can’t Change your Minimum Payment Due Date
If you want the ability to change your due date to make your monthly payments more manageable, The Petal cash back no fees Visa cards lack this capability. For some, that could be a deal breaker.
Petal Card Scores
Starter Card – 5/5
This card is a really great credit card for people who are seeking their first credit card. With no annual fee, no security deposit, and a unique underwriting that looks at cash flow, you’ll be hard pressed to find a better option.
Most starter cards have low credit limits which can make keeping your credit utilization low difficult. The Petal 1 no fees Visa credit card will reward you for paying your bill on time and keeping within your recommended credit score by bumping up your credit limit.
The Petal 2 Visa will earn you a solid 1%, which can be bumped up to 1.25% and 1.5% for building a solid payment history. These features enable each no fees Visa credit card to “grow” with you, as you build your credit.
Rewards – 4/5
Many cards in this category don’t even offer any ability to earn rewards. Each of these no fees Vsia credit card products gives newbies this chance. Granted, the Petal 1 doesn’t have the most consistent rewards program. It’s still better than nothing.
The Petal 2 no fees Visa credit card is far more competitive with its starting point of 1%. Then as you build your credit, you have the chance to boost your earnings. The max earning is 1.5% which makes it extremely competitive with cards that are generally geared towards those with more estalablished credit histories.
Benefits – 3/5
The additional benefits on the Petal 1 no fees Visa credit card are pretty much the standard. The Visa Local Offers with Uber, roadside assistance hotline, and rental car collision insurance (secondary to your own policy) is nothing to get too excited about.
The Petal 2 Visa doesn’t offer anything anymore spectular. You get essentially the same Visa benefits plus some extras likethe identity theft coverage. This benefit allows you to enroll for free with ID Navigator and receive alerts when there is a potential threat and assistance if you are compromised.
Customer Service – 4/5
Credit card companies like Discover and Citi have been around for much longer than Petal has. The Petal 2 Visa was launched in October of 2018.
Petal offers a robust FAQ and help center on its website. You can find answers to many of your questions there including how to manage your account.
If you need additional help, you can email there customer service at firstname.lastname@example.org or call 1-855-697-3825. Available, 24 hours a day and seven days a week, Petal’s customer service team is there whenever you need them.
Mobile App – 5/5
Petal’s mobile app is simple, and easy to use. You can find cash back offers through their Petal Perks program using the app to find local deal (must share your location).
If you use your Petal Visa card to subscribe to popular services like Netflix and Spotify, it can show you how to cancel them. This makes it easier to unsubscribe from subscriptions that you are no longer using.
Petal makes it easy to track your credit with the ability to track your credit score all on its app.
It also has some useful budgeting features. The payments calculator that will help you understand exactly the amount of interest that you will owe based on what you pay. You can also set a budget on the app and see how you’re spending against it.
After reaching this Petal Visa credit card review, you’ve probably got a sense of whether these cards are right for you. If you are new to credit and have never had a credit card in your own name before, the Petal cards are a better value than when you compare it to secured cards. If you can qualify for the Petal 2 Visa, that’s even better since the cash back rewards are competitive with many of the standard unsecured cards out there.