Petal® 1 Visa® Credit Card review: Good for those new to credit

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Pros

Lender may consider more than credit scores
No security deposit required to build credit
Offers cash back at certain retailers
No annual fee

Cons

Doesn’t earn cash back on all purchases
High purchase APR

Petal® 1 Visa® Credit Card: The gist

The Petal® 1 Visa® Credit Card offers limited rewards, but it has a $0 annual fee and several helpful features to help you build credit.

If you’re thinking of applying, here are some of this card’s biggest features to keep in mind.

Petal considers more than just your credit scores

If you’re interested in seeing if you qualify for the card, you have the ability to prequalify without affecting your credit. When you’re ready to submit your formal application, the card’s issuer, WebBank, will run a hard credit check which may show up on your credit report.

If you don’t have enough of a credit history for the credit card issuer to make a decision, Petal will ask you to connect your bank account so it can develop what it calls a “cash score” for you. In creating your cash score, Petal will look at factors like how much you earn and your spending habits to determine your overall cash flow and financial responsibility.

This may mean that you don’t have to worry about the Catch-22 that can occur when you have a limited credit history but want to apply for a loan or credit card — you can’t build a credit history without credit, but it’s tough to qualify for credit without a credit history.

And for a card that doesn’t always require a credit score, it’s impressive that the Petal® 1 Visa® Credit Card doesn’t require a security deposit. As a result, you don’t have to lock up a few hundred dollars or more with your card issuer like you do with secured credit cards. That said, you may not qualify if you have low credit scores.

You can earn cash back rewards, but it’s limited

The Petal® 1 Visa® Credit Card offers 2% to 10% cash back rewards via the Petal Offers platform when you make eligible purchases at certain retailers.

Unfortunately, if the retailers featured on the Petal Offers platform don’t align with your spending, you’ll earn little to no rewards with the card. But if they do, it could be an excellent opportunity to get more value while you build credit.

Not a lot of fees

Petal doesn’t charge a ton of fees. If you don’t pay at least the minimum on time, it could cost you up to $40 for a late fee. Returned payments will cost you up to $29 a pop. But that’s it — there’s no annual fee and no foreign transaction fees.

One area where the card doesn’t shine is its variable purchase APR, which ranges from 29.49% - 34.49%. It’s common to see an APR that high for this type of card, but if you’re thinking of getting the Petal® 1 Visa® Credit Card, make it a priority to pay your bill on time and in full every month.

What else you need to know about the Petal® 1 Visa® Credit Card

If you’re still on the fence about the Petal® 1 Visa® Credit Card, here are some other features to consider in your decision-making process.

Petal reports your payments to all three major credit bureaus.
Petal’s mobile app allows cardholders to set a budget and track spending.
With the app, you can view how much interest you’ll pay based on your planned monthly payment.
The Petal app shows you select merchants in your area that offer cash back.
You can use the app to see what you’re paying for recurring subscriptions and to see how to cancel the ones you don’t need.

Who this card is good for

The Petal® 1 Visa® Credit Card is an excellent choice for someone who’s brand new to credit and wants to establish a credit history. If you manage your money relatively well, you can connect your bank account to help get approved.

The card isn’t the only unsecured credit card for people who are new to credit. But if you like the idea of paying few to no fees and having a handy app that provides tools to help you manage your money so you can make on time payments, this card could be for you. Just be sure to pay on time and in full to avoid late fees and interest charges.

If you’ve already spent some time building your history and have fair or good credit, though, you could get better perks and features with a different card.

Not sure this is the card for you? Consider these alternatives.

Petal® 2 Visa® Credit Card: This card is good for people who like what Petal offers but have already started building their credit history.
Capital One Platinum Credit Card: This is a good option for people looking to build credit and get access to higher credit limits quickly.

About the author: Ben Luthi is a personal finance freelance writer and credit cards expert. He holds a bachelor’s degree in business management and finance from Brigham Young University. In addition to Credit Karma, you can find his wo… Read more.

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