Petal 1 Credit Card Review: A Low-Fee Credit-Building Alternative

This card can offer a path to credit — and even rewards — for people with a less-than-ideal cash flow or credit history. The issuer can look beyond just credit scores to determine eligibility.
Melissa LambarenaNov 12, 2021

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

Our Take

3.9

NerdWallet rating 

The bottom line: There’s no annual fee or security deposit required, and you’ll avoid charges typically found on unsecured cards for bad credit. But if you have good credit or a strong cash flow, a different Petal card has more to offer.

Petal 1 "No Annual Fee" Visa® Credit Card

on Petal's website

Annual fee

$0

Regular APR

19.99% - 29.49% Variable APR

Intro APR

N/A

Recommended Credit Score

Quick Facts

Pros & Cons

Pros

  • No annual fee
  • Qualify with limited/bad credit
  • No foreign transaction fees
  • Reports to the three major credit bureaus

Cons

  • No bonus offer
  • No intro APR offer

Compare to Other Cards

NerdWallet rating 
NerdWallet rating 
NerdWallet rating 
Annual fee

$0

Annual fee

$0

Annual fee

$35

Regular APR

19.99% - 29.49% Variable APR

Regular APR

22.99% Variable APR

Rates & Fees

Regular APR

17.39% Variable APR

Intro APR

N/A

Intro APR

10.99% intro APR on Balance Transfers for 6 months

Intro APR

N/A

Recommended Credit Score
Recommended Credit Score
Recommended Credit Score

Get more smart money moves — straight to your inbox

Become a NerdWallet member, and we’ll send you tailored articles we think you’ll love.

Full Review

The $0-annual-fee Petal® 1 "No Annual Fee" Visa® Credit Card is one of two cards in Petal's portfolio — both issued by WebBank — that can facilitate a path to credit for newbies without having to rely solely on traditional FICO scores to determine creditworthiness.

Beyond that, the Petal 1 offers decent features for a starter card, including a report to all three major credit bureaus and the chance to earn rewards. No security deposit is required, and it also doesn't pack the kind of sneaky charges — annual fees, activation fees, monthly maintenance fees — that can be typical of unsecured cards for bad credit.

But this version is meant for those who don't have a strong enough cash flow or credit history to qualify for Petal's other card, the Petal® 2 "Cash Back, No Fees" Visa® Credit Card. That product offers more robust rewards, not to mention a lower potential APR and a higher possible credit limit. Also, the Petal 2 promises "no fees of any kind," which is not necessarily the case with the Petal 1.

For more information on how the two Petal cards differ, see the table below. But here's what to know about the Petal 1.

Petal® 1 "No Annual Fee" Visa® Credit Card: Key features

Card type: Starter and alternative.

Annual fee: $0.

Security deposit: None.

Sign-up bonus: None.

Rewards: Up to 10% cash back when you use the card to make purchases with select merchants.

APR: The ongoing APR is 19.99% - 29.49% Variable APR.

Penalty APR: None.

Credit limit: $300 to $5,000, depending on creditworthiness.

Foreign transaction fee: None.

Other perks:

  • Payments reported to three major credit bureaus: TransUnion, Equifax and Experian.

  • Account management and budgeting tools through the app (iPhone and Android) or mobile-optimized website. For example, before making your monthly payment you can see exactly how much it will cost in interest to carry a balance if you don’t pay in full.

  • Visa partnership benefits that include theft coverage and roadside dispatch. Petal also supports Visa Local Offers, a way to earn Uber credits.

Petal 1 vs. Petal 2

In short, your credit history or cash flow will determine which Petal card you qualify for. (Petal’s pre-qualification process will confirm which option, if either, is a match for you.)

Here's how the two cards stack up:

Card features

Petal® 1 "No Annual Fee" Visa® Credit Card

Petal 1 "No Annual Fee" Visa® Credit Card
NerdWallet rating 
Learn More

Petal® 2 "Cash Back, No Fees" Visa® Credit Card

Petal 2 Credit Card
NerdWallet rating 
Learn More

Security deposit

None.

None.

Fees

  • A $0 annual fee.

  • No foreign transaction fees.

  • A late payment fee of up to $40 if incurred.

  • A returned payment fee of $29 if incurred.

None.

Sign-up bonus

None.

None.

Rewards

Up to 10% cash back when you use the card to make purchases with select merchants.

  • Up to 1.5% cash back on all eligible purchases after making 12 on-time monthly payments.

  • Up to 10% cash back when you use the card to make purchases with select merchants.

APR

The ongoing APR is 19.99% - 29.49% Variable APR.

The ongoing APR is 12.99% - 26.99% Variable APR.

Credit limit

Up to $5,000, depending on creditworthiness.

Up to $10,000, depending on creditworthiness.

Why you might want the Petal® 1 "No Annual Fee" Visa® Credit Card

Evaluation based on multiple factors

To qualify, you must be a U.S. resident with a valid Social Security number or an individual taxpayer identification number. But in this case, the issuing bank can use Petal’s algorithm to look beyond credit scores, analyzing banking data that offers a full picture of how you manage your income, savings and spending. As a result, linking your bank account may be required to get a pre-approval decision. Petal claims on its website that it has read-only access and does not store your login credentials.

No security deposit

Unlike secured credit cards for those with bad or limited credit, the Petal® 1 "No Annual Fee" Visa® Credit Card doesn’t require an upfront deposit as collateral. Also unlike secured cards, which typically base your credit limit on that deposit amount, the Petal® 1 "No Annual Fee" Visa® Credit Card bases your credit limit on your creditworthiness. That spares you from having to pay a few hundred dollars upfront that would otherwise be tied up until yo close the account (or upgrade it to an unsecured card).

A chance at rewards

When you're just starting out with credit, earning rewards isn't necessarily a priority; building your credit is. But if you can also earn rewards while doing so, even better. The Petal® 1 "No Annual Fee" Visa® Credit Card offers up to 10% cash back when you use the card to spend with select merchants. These offers are automatically loaded to your Petal account.

A shot at a higher credit limit

If you do not already have a maximum credit limit of $5,000, the Petal® 1 "No Annual Fee" Visa® Credit Card offers the Petal Leap program which may reward you with a higher credit limit. To qualify, you'll have to make at least six consecutive monthly minimum payments or pay 15% of your statement balance, whichever is greater. You also can't allow your Vantage Score to drop 50 points or more below your initial credit score at the time of approval. A higher credit limit can have a positive impact on your credit score because it lowers the amount of available credit you're using.

Light on fees

The Petal® 1 "No Annual Fee" Visa® Credit Card does charge certain penalty fees — including late fees and returned payment fees — but those can be easily avoided with responsible credit card use (paying your bill on time every month and making sure you have enough funds to cover those payments). It doesn’t, however, charge a late penalty APR. In many ways, this is a step up from some unsecured credit cards that charge annual fees, activation fees, monthly maintenance fees, foreign transaction fees and others.

Travel-friendly features

The Petal® 1 "No Annual Fee" Visa® Credit Card is an excellent travel companion. As noted above, it has no foreign transaction fees, which typically range from 1% to 3% per transaction for other credit cards. And as part of the Visa network, it also has broad international acceptance.

Why you might want a different card

You want better rewards

If you can qualify for it, the Petal® 2 "Cash Back, No Fees" Visa® Credit Card offers up to 1.5% in cash back on all purchases — not just rewards with select merchants (terms apply). But this option requires you to have a stronger cash flow or credit history. If you can’t meet that requirement, the $0-annual-fee Discover it® Secured Credit Card can offer 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. All other purchases earn 1%. Unlike either Petal card, it also offers a chance to earn a sign-up bonus. But — also unlike the Petal cards — you’ll have to pay a security deposit of at least $200.

You lack a Social Security number

To qualify for the Petal® 1 "No Annual Fee" Visa® Credit Card, you must be a U.S. resident with a valid Social Security number or an individual taxpayer identification number. If you’re a newcomer to the U.S. and can’t meet this requirement upfront, the $0-annual-fee Deserve® EDU Mastercard for Students could be an option, at least if you're an international student.

You want to be able to change your minimum-due date

Petal doesn’t offer the option to change your minimum payment due date, so you’re locked into the date you're assigned. If you need more flexibility, consider the Capital One Platinum Secured Credit Card. You’ll have to pay a security deposit to qualify, but if you’re eligible you might be able to pay one as low as $49 depending on your creditworthiness. It has a $0 annual fee, but it doesn’t offer rewards.

Is the Petal® 1 "No Annual Fee" Visa® Credit Card right for you?

The Petal® 1 "No Annual Fee" Visa® Credit Card is a solid choice to begin or continue building credit. You’ll face fewer potential fees than you would with an unsecured credit card for spotty credit, and no fees at all if you pay your bill on time. Plus, you’ll get rewards when you use the card to shop with eligible merchants.

To see how this card stacks up with the competition, see NerdWallet's list of the best credit cards.