Is The Petal 2 Worth It
If youre a responsible spender with a limited credit history, theres not much downside to the Petal 2. Given that most credit building cards offer little to no rewards, require deposits and fees or have low credit limits, the Petal 2 is an attractive option. As long as you commit to paying your balance in full by the due date each month, this card could be a great first step on the path to building your credit.
The Petal Card is issued by WebBank, Member FDIC
Is The Petal 2 Visa Card Right For You
This card is a great option for people looking to build credit with no credit history.
Its even on our list of best credit cards for no credit history, primarily because of the unique approval process available for credit novices. When you apply, your creditworthiness might not only be determined by your credit score. Instead, Petal may create a Cash Score based on income, savings, and spending history using your bank account information.
We also like Petal 2 Visa for its lack of fees and potential rewards, combined with ongoing incentive for cardholders to practice good credit habits. Often, people with little credit history have few credit-building options outside of secured credit cards. However, the Petal 2 Visa Credit Card is an unsecured card, which means you can start building credit without putting down a deposit as collateral.
Theres no annual fee and no late or returned payment fees, and the minimum credit limit is $300 which is higher than many other starter cards. Plus, you get the chance to earn rewards on your spending. After 12 on-time payments, you can earn as much as 1.5% cash back, which is not bad compared to other cash back credit cards on the market, and especially good for a starter credit card.
How To Apply For The Petal 2 Cash Back No Fees Visa Credit Card
You can fill out WebBank’s initial pre-qualification application for the Petal® 2 “Cash Back, No Fees” Visa® Credit Card online in about 15 minutes. The pre-qualification process results in a soft pull on your credit report, so it won’t impact your credit at all.
The pre-qualification application asks for basic personal information such as your birthday, phone number, and home address. You may also be asked to connect your checking, savings, and credit accounts so Petal can get a sense of your earnings and savings as well as your spending habits, which is meant to increase your chances of approval. Petal uses a third-party data provider and connects to your accounts securely, and it never stores your login information.
After this, Petal will let you know if you’re pre-approved for its Petal® 2 “Cash Back, No Fees” Visa® Credit Card, which gives you a sense of your eligibility without dinging your credit. Keep in mind that pre-qualifying doesn’t guarantee you’ll be approved for the card. If you are pre-approved, you can finish the full application online and Petal will do a hard pull on your credit report, which might have a small, temporary effect on your credit.
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Petal 1 Visa Vs Petal 2 Cash Back No Fees Credit Card
The Petal 1 card is exactly as it markets itselfa starter card. Its features are mainly aimed at accessibility for people without any credit history , the Petal 1 Visa is a good way for cardholders to learn the credit-building ropes.
However, the Petal 2 Card and its rewards blow the Petal 1 Card out of the water. Similar to Petal 1, it also has no annual, transaction, or foreign fees, but its safety net extends to waiving any late or returned payment feeswhich is an uncommon perk that can be a saving grace if youre new to credit. Whats more, theres no security deposit requirement since the Petal 2 is also unsecured. If you might carry a balance in an emergency, the Petal 2 has a better APR as well .
Approval With The Petal Cash Score
Since a FICO Score is made up of payment history, credit utilization and length of credit history all data that comes from your experience using credit its nearly impossible to get approved for the best credit cards on the market without a credit score. Plus, some of the cards available for new cardholders, with their low credit limits and steep fees, make it difficult to build credit.
Thats how the Petal 1 Visa Credit Card can help. Instead of judging you based on a nonexistent credit score, Petal takes a detailed look at an applicants income and expenses and develops your Petal Cash Score. This is important because being new to credit doesnt mean youll be irresponsible with credit. If youve got a good job and healthy financial habits, pay your rent, cellphone and utility bills on time and are even saving money for a rainy day, youre likely to be a borrower. Petal is simply looking a little harder to find you. Because of this, financially responsible individuals with no credit have good approval odds for the Petal 1 Visa Credit Card.
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Alternatives: Good Cards If You Have Average Credit
Capital One QuicksilverOne. This is another card available to those with average credit and it also offers rewards. You earn 1.5% cash back on all purchases, with no limits. However, it does have a $39 annual fee.
Capital One Platinum. Like the Quicksilver, this card is a good basic option available to people with average credit. However, this card doesn’t offer any rewards though it doesn’t have an annual fee either.
Petal 2 Visa Card Review
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The Petal 2 Visa card is an excellent starter card for those with no credit history. Unlike many cards for those with limited credit, it requires no security deposit and has no fees of any kind, including no annual fee. You can qualify for a credit limit between $500 and $10,000.
The card allows you to earn up to 1.5% cash back on your purchases over time, and it even offers benefits like secondary auto-rental insurance.
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Preapproval For The Petal 2 Cash Back No Fees Visa Credit Card
If you’re worried about your application being denied, you can visit the card’s website to see if you are preapproved for the Petal® 2 Cash Back, No Fees Visa® Credit Card. Utilizing a preapproval for a credit card is a great way to understand your financial options before making a decision on the product that works best for you.
The best part? A preapproval will not cause a hard credit inquiry, but rather a soft credit inquiry to see if you can qualify. This means that your credit score will not be affected by the preapproval process whatsoever.
Does Petal 2 Credit Card Require A Credit Check
Yes, the official application for the Petal® 2 Cash Back, No Fees Visa® Credit Card requires a hard credit inquiry. Keep in mind though that you will have to pre-qualify for a card before you can get to the official application. Do note, being pre-qualified for the card does not automatically mean that your official application will be approved.
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How Petal’s Interest Charges Work
Petal has an APR range for cardholders. As a general rule, the better your credit score and other financial details, the lower your rate is likely to be.
The APR range is comparable to what you could find with other cards, both unsecured and secured. You never pay interest as long as you pay your full bill on time each month.
If you carry a balance, your regular purchase APR applies.
But, Petal tells you exactly what it’ll cost you in interest to carry a balance on your statement.
You can decide for yourself whether to pay in full or pay over time.
That kind of transparency is something else that makes Petal unique from other credit cards.
Even better, Petal only charges interest on balances that are past due. You won’t be charged interest on new purchases if you pay those in full.
What Is The Petal Card
Self-described as a credit with a conscience, the Petal Card is designed to put credit in the hands of creditworthy people who would otherwise have a hard time getting it.
This is accomplished by judging potential borrowers on the transaction history of their bank accounts rather than their credit scores.
Petal offers two versions of its credit card: Petal® 1 No Annual Fee Visa® Credit Card and Petal® 2 Cash Back, No Fees Visa® Credit Card. Ill break down what each of these offer later in the article.
The cards carry no annual fee and, unlike secured credit cards, they do not require a security deposit.
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Unlocking The Power Of Your Data
Until recently banks owned their customer’s banking history. If you switched banks your history wouldn’t come with you. Not anymore. Thanks to modern technology and new regulationsÂ¹, your banking history belongs to you. This has created new possibilities for how people manage their money. And even apply for credit.
Does The Petal 2 Credit Card Give Credit Increases
The credit line on a Petal® 2 Cash Back, No Fees Visa® Credit Card can be increased if a cardholder qualifies for it. Eligible cardholders have to 1) pay the greater of their minimum payment or 15% of their monthly statement balance by the payment due date, for six consecutive months and 2) ensure their Vantage Score doesnt fall below 25 points of the credit score they had when initially applying for the card.
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How The Petal Card Is Different From Other Credit Cards
The primary difference between the Petal Card and many other cards on the market is the way that the company evaluates your creditworthiness.
While traditional credit card issuers evaluate you primarily by looking at your credit report and credit score, the Petal Card takes a non-traditional approach and measures other things that can indicate your level of financial responsibility.
We use more data than credit history to make credit decisions, Jason Gross, co-founder and chief executive of Petal, told TechCrunch. Theyre common sense metrics about your finances: how much you make, save and spend every month.
This analysis is possible thanks to relatively new federal regulations that let your banking history follow you from institution to institution, kind of like a credit history.
Petals access to this data has allowed it to evaluate a new measure of creditworthiness that it calls a Cash Score.
For people who have little to no credit history, thats potentially a big improvement in making a case for access to credit.
It keeps people from having to seek credit in the form of a secured credit card, which Clark says should be the last place you should ever go for a credit card due to poor terms, high fees and interest rates.
Approval Odds Are Still Greater On A Secured Card
An applicants credit approval would still be better on a secured credit card over the Petal 1 or Petal 2 Visa credit cards. Thats because those who have hurt their credit score through situations like declaring bankruptcy or have a track record of missing their monthly payments have lower approval odds.
Even if you have decent or fair credit, your approval odds arent assured. Since Petal uses algorithms that look at a variety of personal data, having a middle of the range credit score may not be enough to get you approved.
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You Want To Be Able To Change Your Minimum
Petal doesnt offer the option to change your minimum payment due date, so youre locked into the date you’re assigned. If you need more flexibility, consider the Capital One Platinum Secured Credit Card. Youll have to pay a security deposit to qualify, but if youre eligible you might be able to pay one as low as $49 depending on your creditworthiness. It has a $0 annual fee, but it doesnt offer rewards.
To Qualify For An Automatic Credit Limit Increase:
Petal 1 cardholders must pay the minimum due or 15% of their balance for six consecutive months + keep their VantageScore credit score from falling 50+ points from when they applied.
Petal 2 cardholders must pay the minimum due or 15% of their balance for six consecutive months + keep their VantageScore credit score from falling 25+ points from when they applied.
Petal card credit limits are generally pretty good. In fact, Petal 1 credit limits range from $500 to $5,000, and Petal 2 credit limits range from $500 to $10,000. If youre looking for a high credit line, you can always compare these offers to the best high limit cards for bad credit.
How do you get approved for a Petal card?
To get approved for a Petal card, you are required to have a valid email address, a U.S. telephone number, and a Social Security number or Individual Taxpayer Identification Number. Applicants must also be at least 18 years old and a permanent resident of the United States or a U.S. military location. Having limited credit or better and earning enough money to pay your bills is required for approval as well.read full answer
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Underwriting Can Be More Favorable To Those Seeking To Build Your Credit
Petal Card uses an algorithm that analyzes your income, savings, and spending to help it make underwriting decisions. Your bank account needs to be linked for Petal to receive this information.
If youre worried about security, Petal does not keep your login credentials. Additionally, they only have read-only access to your bank account.
This makes it great for those who dont have a lot of credit history to get a no fee, Visa credit card.
Whats The Difference Between Petal 1 And Petal 2
Petal 1 is a card designed for those with low-to-fair credit or cash flow who are seeking to improve their credit score. Petal 1 members are subject to late payment and returned paymentfees.
Petal 2 is our most advanced card yet, and its designed for those with fair-to-good credit or cash flow. With Petal 2, you can enjoy all the perks of a cash back card without any of the fees. No annual fee, late payment fee, foreign transaction fee, or any-other-kind of fee. If you were approved for a Petal card before October 1 2020, then you have a Petal 2 card.
To see which card is the best fit, just complete the first part of the application . Youll be able to see which card youre pre-approved for, without an affect to your credit score. If you arent pre-approved for Petal 2, you may be eligible for Petal 1.
Both cards come loaded with 2% – 10% cash back Offers from top brands and over 500 local businesses. For the full rundown on how the Petal cards compare, .
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Must Link Your Bank Account
The reason that Petal is able to be so welcoming of borrowers without credit:
You must provide third-party read-only access to your online bank accounts.
Petal can see the activity and balances of your bank accounts and other loans to evaluate your credit risk.
On an ongoing basis, Petal reserves the right to change your APR and credit limits based on such activity.
Even though you may not have a history of repaying loans, you can leverage your good history:
- Consistent income
- Paying bills
- Building savings
Unfortunately, customers of certain banks may not qualify for Petal if those banks do not allow such read-only access of customer account data.
A Solid Rewards Program
The 1.5% maximum cash-back rate on the Petal® 2 “Cash Back, No Fees” Visa® Credit Card equals the ongoing rate on stalwart cards like the Capital One Quicksilver Cash Rewards Credit Card and the Chase Freedom Unlimited®. You’ll need a year of on-time payments to work your way up to the top rate, but even the 1% base rate is better than what you’ll get on most starter cards.
» MORE:How 1.5% cash back became the industry standard for credit cards
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How Does The Petal 2 Cash Back No Fees Visa Credit Card Compare To Other Credit Cards
The Petal® 2 Cash Back, No Fees Visa® Credit Card is a unique cashback credit card that differentiates itself from other credit cards that are currently available. With no fees, and a cashback program that incentivizes consumers to pay their bills on time, it is great for someone building their credit.
However, how does it stack up against its competitors?
Is The Petal 2 Visa Credit Card For You
Everythings coming up roses when we compare the Petal 2 card to similar options for people with fair credit. The cards lack of annual and other account fees, potential for a strong rewards structure and the ability to qualify for a lower APR than most cards aimed at those working on building their credit has the Petal 2 card smelling sweet.
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