Petal Credit Cards Review – Which Is Right for You?
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The Petal card offers two rewards credit cards, Petal 1 and Petal 2. Unlike typical credit card lenders, which decide whether or not to approve applicants based on your credit score, Petal uses your banking history to calculate a measure of your creditworthiness based on income, spending, and savings. This can help you be approved for a card even if you have a thin credit history or are still raising your score.
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What are petal credit cards?
There are two unsecured credit cards currently available from Petal. Petal® 1 "No Annual Fee" Visa® Credit Card is a good fit for new borrowers, while Petal® 2 "Cash Back, No Fees" Visa® Credit Card has a higher credit limit, lower annual percentage rate (APR), and more extensive rewards options. Neither card charges an annual fee, and both come with helpful money management tools to help borrowers stay on track to meet their financial goals.
Raise Your Credit 80 points*
- 5 star service trusted by over 450,000 members
- Have processed over $11,000,000 in bill payments for members
- No deposit, no credit check, no interest
- New member promotions available
*Potential increase based on StellarFi member data. StellarFi numbers observed an average of 80 points VantageScore® 3.0 increase during a member’s lifetime. Score increase based on members with an incoming score range of 300-499 pts, who made regular on-time payments, with regular on-time payments. Results may vary.
How do Petal credit cards work?
To apply for a Petal credit card, you’ll need to complete a simple application on their website.
You’ll need to provide basic information about yourself, including your name, email, birthday, phone number, and social security number. You’ll also need to provide information about your employment, income type, and annual income. Petal will also ask about where you live and how much you pay for rent or monthly mortgage payments.
After you provide Petal with the relevant information, you may be asked to link a bank account so that Petal can verify your income, saving, and spending patterns.
How much do Petal credit cards cost?
Both Petal credit cards are free to use and charge no annual or international fees. Petal 1 charges late and returned payment fees if you fail to make monthly payments on time, but Petal 2 does not. Petal 1 has variable APR interest rates ranging from 24.74% to 34.24%, while Petal 2 has variable rates between 17.74% to 31.74%. Remember that Petal doesn’t support balance transfers, so it’s not a good fit if you want to transfer a balance from another card.
Petal credit card features
Some Petal credit card features include higher approval rates, the opportunity to earn cash back, and money management tools to help you save.
Cash score instead of credit score
Applicants for Petal credit cards aren’t judged based on their credit score. Instead, a formula known as a Cash Score considers factors like income, savings, and spending patterns. That means that even if you have a thin credit history or are still working on raising your score, a Petal card could still be within your reach.
No annual or international fees
Unlike many credit cards, Petal cards don’t charge annual or international fees, making them an excellent option for cost-conscious borrowers looking for cards with few fees.
Cash back on purchases
Petal 1 and Petal 2 provide 1% to 10% cash back rewards from select merchants. Petal 2 offers 1% to 1.5% cash back on all purchases, regardless of where you shop.
Potential for a credit limit increase
Petal 1 is designed for beginner borrowers with an initial credit limit of $500 to $5,000. However, you may be eligible for a credit limit increase after six months of qualifying on-time payments.
Budgeting tools
Cardholders can access tools in the Petal mobile app to help them monitor their spending, set a budget, and even track their credit score. This can help borrowers build good financial habits and ensure they don’t overspend.
Raise Your Credit 80 points*
- 5 star service trusted by over 450,000 members
- Have processed over $11,000,000 in bill payments for members
- No deposit, no credit check, no interest
- New member promotions available
*Potential increase based on StellarFi member data. StellarFi numbers observed an average of 80 points VantageScore® 3.0 increase during a member’s lifetime. Score increase based on members with an incoming score range of 300-499 pts, who made regular on-time payments, with regular on-time payments. Results may vary.
Who are Petal credit cards best for?
People with thin credit. If you don’t have a limited credit history or are still building credit, Petal could be a good option. Petal understands that credit scores don’t always tell the whole story. Instead of basing approval on your score, they consider factors like income, savings, spending patterns, and payment history. Petal features pre-approval that allows borrowers to see if they qualify without affecting their score. Overall, Petal is a sound starter card for consumers looking to build their score responsibly.
People looking for a cash-back rewards card. If you’re looking for a card that earns cash back but does not qualify for more lucrative cards with stricter requirements, Petal is worth considering. Petal 1 provides anywhere from 2% to 10% cash back at select merchants, while Petal 2 offers a flat 1% to 1.5% cash back on all purchases.
Who shouldn’t use Petal credit cards?
People with great credit. If you already have excellent credit, the chances are that you can qualify for cards with better rewards than the Petal cards can offer. For example, many lenders feature cards with up to 2% cash back, rotating bonus cash back categories, generous welcome bonuses, and additional travel and shopping perks.
People looking for travel rewards. Petal credit cards do earn cash back, but they don’t offer anything in travel rewards or discounts. Other credit card offers are worth pursuing if you’re looking to maximize points, miles, and other travel benefits.
Related: Best Rewards Cards
Pros and cons
Pros
- Uses banking history to evaluate applicants: Rather than basing the approval process on your credit score, Petal evaluates your banking history to determine whether you qualify for a card.
- Earns cash back: Unlike many cards targeting borrowers with thin credit, Petal cards earn cash back.
- No annual fee: With no annual fee, these cards are affordable even for borrowers on a budget.
Cons
- Low cash back rate: While these cards earn cash back, their rates aren’t as generous as some other cards.
- Petal 1 charges some fees: Petal 1 charges late fees and returned payments fees. They have no intro APR for the first year, so unpaid balances will start accumulating interest at the regular APR rate right away.
- Limited perks: Unlike many of the best credit cards, Petal doesn’t come with a slew of additional perks.
Petal vs. competitors
Creditor | Annual fee | Cash back | Deposit required |
Petal | $0 | 2% to 10% at select merchants, up to 1.5% cash back on all purchases with Petal 2 | No |
Discover it Secured | $0 | 2% on restaurant and gas, 1% on everything else | Yes |
Capital One Platinum Credit Card | $0 | N/A | No |
Chase Freedom Unlimited® | $0 | Enjoy 5% cash back on travel purchased through Chase Travel℠, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases | No |
Discover it® Secured Credit Card
Discover It® Secured Credit Card
Card Name
Discover It® Secured Credit Card
APR
28.24%
Recommended Credit Score
N/A
Annual Fee
$0
Rewards Rate
Earn 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, automatically. Earn unlimited 1% cash back on all your other purchases automatically. 2x cash back with Cashback Match, get an unlimited dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
Why We Like It
- Credit-building credit card with limit you set with your deposit.
- Automatic review in 7 months to see if you can transition into an unsecured line of credit and return your deposit.
Capital One Platinum Credit Card
Capital One Platinum Secured Credit Card
Card Name
Capital One Platinum Secured Credit Card
APR
29.99%
Recommended Credit Score
Limited, Bad
Annual Fee
$0
Special Offer
No annual or hidden fees.
Special Offer Terms
See if you're approved in seconds.
Rewards Rate
N/A
Terms
Why We Like It
- No annual or hidden fees.
- You could earn back your security deposit as a statement credit by making on-time payments.
- Be automatically considered for a higher credit line in as little as six months with no additional deposit needed.
- Monitor your credit score for free with CreditWise from Capital One.
Chase Freedom Unlimited®
Chase Freedom Unlimited®
Card Name
Chase Freedom Unlimited®
APR
20.49% - 29.24%
Recommended Credit Score
Excellent, Good
Annual Fee
$0
Special Offer
Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year)
Special Offer Terms
— worth up to $300 cash back. That's 6.5% on travel purchased through Chase Travel℠, 4.5% on dining and drugstores, and 3% on all other purchases.
Rewards Rate
Enjoy 5% cash back on travel purchased through Chase Travel℠, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases
Terms
Why We Like It
- Higher cash back on travel purchased through Chase Ultimate Rewards®.
- No minimum to redeem for cash back.
- No annual fee.
- Monitor your credit for free access using Chase Credit Journey.
FAQs
What’s the difference between Petal 1 and Petal 2?
Petal 1 and Petal 2 share many similar features, but there are a few essential differences. Petal 1 has a lower credit limit, a higher APR, and fewer opportunities to earn cash back. Petal 1 also charges late payment fees and returned payment fees. Petal 2 is fee-free, and earns 1.5% cash back on all purchases. It also features higher credit limits and lower APRs.
Will I qualify for a Petal credit card with bad credit?
It depends. Instead of evaluating your application based on your credit report, Petal evaluates your banking history, paying particular attention to factors like your income, savings, and spending patterns. If your credit isn’t where you want it to be, but you earn a decent income and spend responsibly, you could still qualify for a Petal card.
Do Petal credit cards charge fees?
Both cards charge no annual fees and no foreign transaction fees. Petal 1 does charge late fees and returned payment fees.
Raise Your Credit 80 points*
- 5 star service trusted by over 450,000 members
- Have processed over $11,000,000 in bill payments for members
- No deposit, no credit check, no interest
- New member promotions available
*Potential increase based on StellarFi member data. StellarFi numbers observed an average of 80 points VantageScore® 3.0 increase during a member’s lifetime. Score increase based on members with an incoming score range of 300-499 pts, who made regular on-time payments, with regular on-time payments. Results may vary.
The bottom line
If you have a thin credit history or are still working to rebuild your credit, it can be challenging to qualify for a rewards credit card. Petal cards are more accessible to borrowers because they focus on your banking habits rather than your credit. With no annual fees and an attractive rewards program, these cards are a good fit for borrowers looking for a beginner credit card.
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Writer
Margaret Wack covers personal finance and small business and has appeared on MoneyUnder30, The Simple Dollar and Interest.com.
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