Petal^® 1 No Annual Fee Visa^® Credit Card Review

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. There’s also the Petal^® 2 Cash Back, No Fees Visa^® Credit Card, which is a rebranded version of the original and is aimed at applicants with somewhat better credit scores than the Petal 1 Credit Card. Both cards are issued by WebBank.

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

Finally, while many cards meant to help consumers establish or repair credit are secured (requiring a deposit be paid to the issuer), the Petal cards are unsecured. If you’re looking to build credit but don’t want to tie up money in a security deposit, Petal may be the right choice for you.

• Rewards on some purchases

  Earn 2% to 10% cash back at select merchants. Many cards for consumers who need to rebuild credit don’t offer rewards at all, so this is a nice feature.

• Builds credit history

  Petal reports to the three major credit bureaus — Equifax, Experian and TransUnion. This means as long as you pay on time and keep your utilization ratio low, you’ll be building positive credit history and working your way to an excellent credit score.

• $0 annual fee

  Petal does not charge an annual fee for this card, so you don’t have to pay just to carry it.

• Foreign transaction fee: None

  You can rest easy when traveling outside the United States with the Petal 1 Credit Card, because its foreign transaction fee is none.

• Potentially high credit limit

  If approved, your credit line will range from $300 to $5,000 based on creditworthiness. For a card aimed at people who are new to or rebuilding their credit, this is a potentially high credit limit.

• Rewards program limited

  You’ll only earn cash back on purchases at select merchants, not on all purchases. However, if you’re working to build or rebuild your credit, rewards shouldn’t be your primary focus anyway.

• Comes with some fees

  While the other credit card from Petal — 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 returned payments. However, if you pay on time and in full every month, you can avoid late fees, as well as interest charges.

• Has a high interest rate

  This card has a 25.24 - 34.74% Variable APR based on creditworthiness. While that’s in line with other cards for consumers with n/a credit, it’s still a best practice to pay off your statement in full every month to avoid incurring interest charges.

Like the Petal 1 Credit Card, the AvantCard Credit Card is an unsecured card (meaning it doesn’t require a deposit) aimed at helping consumers build a good credit history through responsible behavior. If you’re trying to repair bad credit, the AvantCard Credit Card might be more accessible than the Petal 1 Credit Card. You can check on Avant’s website if you qualify for the card without hurting your credit score — though there will still be a hard inquiry which will knock your score down a few points once you actually apply.

Be aware the AvantCard Credit Card charges a $59 annual fee, and there’s a 35.99%APR. Unlike the Petal 1 Credit Card, you won’t earn rewards. Your payment history and utilization will be reported to the credit bureaus, however, so you’ll build credit as long as you pay on time and don’t max out your card. Unfortunately, consumers living in Colorado, Iowa, Vermont, West Virginia or Wisconsin can’t get this card.

Both of these credit cards are issued by WebBank.

If you have n/a credit, the Petal 1 Credit Card is a solid card to help you establish credit history or improve a bad credit score. With a $0 annual fee and rewards on purchases from select merchants, it’s a good starter card. Just be aware of the 25.24 - 34.74% Variable APR, because if you carry a balance, you could get hit with some expensive interest charges. And if you’re a consumer with somewhat better credit (a n/a credit score), you might consider applying for the Petal 2 Credit Card instead. The Petal 2 Credit Card offers rewards on every eligible purchase and does not charge fees of any kind.

Finally, if your credit is so bad you think you might get denied for either of the Petal credit cards, consider the AvantCard Credit Card instead. It charges a $59 annual fee, but might be more accessible to consumers with limited / poor / fair credit. You could also consider a secured card such as the Discover it^® Secured Credit Card, which requires you to submit a security deposit to the issuer in the amount of your credit limit.