Nerd tip: The credit card described in this article was originally known by the name Petal Visa. In October 2020, it was rebranded as the Petal® 2 "Cash Back, No Fees" Visa® Credit Card. This article has been updated to use the new name for greater clarity.
The Petal® 2 "Cash Back, No Fees" Visa® Credit Card has opened applications to everyone in the United States. The card previously had a waiting list to apply, but as of October 2018, it's now in full bloom as a credit-building option for those without a credit history.
The Petal® 2 "Cash Back, No Fees" Visa® Credit Card — issued by WebBank, member FDIC — joins the growing list of alternative credit cards designed for people who can’t meet traditional credit card qualification standards. Its underwriting process doesn't require applicants to have an established credit history, and it doesn't require a security deposit like many starter cards do. In May 2019, Petal even rolled out a rewards program, further setting the Petal® 2 "Cash Back, No Fees" Visa® Credit Card apart from most cards designed for beginners.
The Petal® 2 "Cash Back, No Fees" Visa® Credit Card could be a game changer for those new to credit. Before making a payment, cardholders can see an estimate of how much it will cost them in interest to carry a balance if they don’t pay the balance in full. The Petal® 2 "Cash Back, No Fees" Visa® Credit Card has a $0 annual fee and it doesn’t charge any additional fees — no late fees, over-limit fees or foreign transaction fees. (The card does not allow cash advances or balance transfers.)
“We have eliminated the credit card fee entirely,” says Jason Gross, co-founder and CEO of Petal. “We are not seeking to profit when our customers make mistakes.”
Basic details of the card:
Interest rate: The ongoing APR is 12.99% - 26.99% Variable APR.
Credit limit: $500 to $10,000, depending on creditworthiness.
Rewards: Up to 1.5% cash back on all purchases. Details:
You start by earning 1% cash back on all purchases.
Make six monthly payments on time, and your rewards rate rises to 1.25% cash back.
Make 12 monthly payments on time, and the rate rises to 1.5% cash back.
Earn up to 10% cash back from select merchants.
Payments reported to all three credit bureaus (TransUnion, Equifax and Experian)
Account management and budgeting tools via the iPhone or Android app, or the mobile-optimized website.
Ability to freeze the card if it’s misplaced or stolen.
You must be a U.S. resident with a valid Social Security number or an individual taxpayer identification number to qualify for the Petal Visa. Petal's issuing bank may evaluate applicants' creditworthiness with its own underwriting model that can take into account their income and other debts. The algorithm also can analyze applicants' expenses and savings, Gross says.
The Petal® 2 "Cash Back, No Fees" Visa® Credit Card's no-fee approach and transparency, not to mention its rewards, make it an attractive option compared with high-fee starter cards or secured cards that require a cash deposit. The card also offers the potential for a higher credit limit and a lower interest rate than you'd find on typical cards for people lacking a credit history.