Petal 1 Review: Build Credit With No Annual Fee
Rating as of Jul. 1, 2022 based on a review of services April 19, 2023.
- Fair
The Petal® 1 “No Annual Fee” Visa® Credit Card (issued by WebBank) is a great no-annual-fee card with a solid rewards system for people with limited or no credit. It reports to all three major credit card bureaus and you can possibly score a higher credit limit between $300- $5,000 — just make sure to use your card responsibly.
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No credit history required, making it perfect for beginners.
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No annual fee, and no over-limit or foreign transaction fees, either.
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2% – 10% cash back at select merchants.
- $0 Annual Fee
- Variable APRs range from 24.74% - 34.24%
- $300 - $5,000 credit limits
- Earn a credit limit increase in as little as 6 months. Terms and conditions apply.
- No credit score? No problem. If eligible, we'll create your Cash Score instead.
- 2% - 10% cash back at select merchants
- See if you're pre-approved within minutes without impacting your credit score.
- No annual or foreign transaction fees.
- Build credit alongside hundreds of thousands of Petal card members.
- Petal's mobile app makes it easy to manage your money, track your spending, and automate payments.
- Petal reports to all 3 major credit bureaus
- No deposits required
- Card issued by WebBank
The Petal 1 Visa® Credit Card is a credit-building card for anyone who’s been burned by a denial letter because their credit wasn’t good enough or old enough.
If you’ve ever felt like a credit card everyone’s talking about just isn’t for you, that’s ok — not every card is meant for everyone. It can feel like a losing game to apply for credit cards when you’re just starting out or working on your credit, but it doesn’t have to be that way.
The Petal 1 credit card by WebBank sets you up to win. It was created specifically with new borrowers and those building credit in mind. The idea is that credit cards are for everyone, but we all have to start somewhere.
This card includes features and benefits to help encourage responsible use plus cash back rewards, making it ideal for beginners and those with less-than-perfect histories.
Key Facts
- Best for: borrowers with poor credit, borrowers with no credit history, and young adults
- Intro offer: none
- Cash back rewards: earn between 2% and 10% cash back when you use your Petal 1 Visa® Credit Card at select merchants
- Intro APR: none
- Regular APR: 24.74% - 34.24% Variable
- Annual fee: $0
- Credit limit: $300 to $5,000 with the opportunity to increase your credit line within six months
- Digital card: the Petal 1 card is compatible with Google Pay™ and Apple Pay®
- Cash score: this is Petal’s own way of calculating your creditworthiness
Pros & Cons
Pros
- No annual fee — While many unsecured credit cards for poor credit and unsecured credit cards charge a yearly fee, Petal is free to use.
- No foreign transaction fee — Pay 0% when you make international purchases.
- High credit limit — Get approved for up to $5,000 depending on your creditworthiness.
- Cash back — 2% - 10% cash back is really generous, even if the categories are limited. A lot of cards for beginners don’t offer cash back or rewards at all.
Cons
- High variable APR — The variable APR is steeper than most ranging from 24.74% - 34.24% Variable.
- Late fee — Pay up to $40 each time you’re late on a payment.
- No intro APR — Users are highly discouraged from carrying a balance.
In-Depth Analysis
Is the Petal 1 right for you? Let’s dig into the details.
Rewards
Petal 1 rewards set this card apart from other credit card alternatives and starter cards. As long as your account is in good standing, you will earn between 2% and 10% in cash back rewards at select merchants. Anyone can earn cash back and you don’t have to opt in.
Rewards offers are always changing. But to give you some examples, Lowe’s, Gap, Rover.com, and fuboTV have appeared as participating merchants before. Each store may set restrictions on what qualifies and ATM transactions and cash withdrawals don’t earn cash back.
The categories are pretty limited and you might not see many of your favorite stores, but it’s always worth checking out. You can see your rewards balance by logging into your account and going to your Cash Back Wallet.
Rewards can be redeemed in any of the following ways:
- Account statement credits
- ACH transfers
- Checks
If you choose to redeem your cash back as a statement credit, there is no minimum balance required to cash out. Just go to the Perks page from the app to request a statement credit. If you choose an ACH transfer or check, you need to have a balance of $20 or more.
Bonus
No bonus just for signing up here. The Petal 1 card doesn’t give a welcome bonus to new users.
Cash Score
This is a really unique aspect of Petal. If you don’t have a credit score, Petal will use your Cash Score instead. To do this, they’ll ask you to link a bank account to determine your cash flow and look at your history of bill payments.
Not everyone gets a Cash Score. If Petal wants to give you one, they will let you know during your application. You may receive a Cash Score even if you already have a credit score in which case both would be used to decide your APR and credit limit.
APR
The variable APR for the Petal 1 is between 24.74% - 34.24% Variable, but where you fall in that range depends on your credit and income. Petal uses your credit score and/or Cash Score to determine this.
These interest rates are higher than most unsecured credit cards. The average maximum sits at around 23% or 24%, so Petal really discourages you from carrying a balance with these high rates.
You can avoid paying interest by making your payments on time. Payments are due 25 days after each billing cycle ends.
Related: Credit Card Interest Rate Calculator
Annual Fee
There’s no catch. The Petal 1 carries a annual fee.
Fees
There’s no foreign transaction fee, but there are a couple of penalty fees worth noting. You will be charged a late fee of up to $40 if you don’t pay off your balance by the due date and a $29 returned payment fee if you have insufficient funds to cover a payment.
You can turn on AutoPay to avoid missing payments and paying fees.
Credit Building
The Petal 1 can help you improve your credit, but just having this card doesn’t guarantee your credit score will increase. It’s up to you to use the card responsibly.
Petal reports your activity to all three major credit bureaus, which can either work for you or against you. Regular, on-time payments look good on your credit report, while late payments will hurt your credit.
You can check your credit at any time using the Petal mobile app without affecting your score.
Plus, because this beginner credit card offers lower credit limits than other unsecured credit cards for more experienced borrowers, you are not at risk of accumulating as much debt.
Related: How To Build Credit the Right Way
No Security Deposit
The Petal 1 Visa® Credit Card is an alternative to a secured credit card. Secured credit cards are also made for those with poor or no credit, but they require a security deposit as collateral when applying. Often, your credit limit is equal to the amount you deposit.
You don’t have to make a deposit when applying for the Petal 1 card.
Credit Limit
For a credit card you can get with bad or minimal credit, the initial credit limit for the Petal 1 is excellent. A max of $5,000 is high for a starter credit card, but how much you qualify for depends on your creditworthiness.
And if you’re not happy with your credit limit, don’t worry – you’re not stuck with it. The Petal Leap program lets you work up to the credit limit you want with regular, on-time payments.
Petal will analyze your profile and give you a target credit range in the app. If you keep on top of your payments and stay within this range, you may be eligible for a credit line increase in just six months.
Spend Planner
Another great feature of Petal is the Spend Planner built into the mobile app. This lets you set a budget for yourself and easily track your spending. The tool will automatically show you how much of your budget you have left to spend.
Related: 5 Steps to Create a Budget That Actually Works
Petal 1 Visa® Credit Card Compared
Wondering how this credit-building credit card stacks up against similar products? See for yourself.
| Petal® 1 “No Annual Fee” Visa® Credit Card | Petal® 2 "Cash Back, No Fees" Visa® Credit Card | Indigo® Platinum Mastercard® | |
|---|---|---|---|
| Fees | No annual fee or foreign transaction fees Late fee of up to $40 | No annual fee, foreign transaction fees, or late fees | $0 - $99 annual fee |
| APR | 24.74% - 34.24% Variable | 17.74% - 31.74% Variable | 24.9% |
| Rewards | Between 2% and 10% cash back at select merchants | Between 2% and 10% cash back at select merchants 1.5% cash back for on-time payments 1% cash back on everything | No cash back |
| Features | Spend Planner, Petal Leap, digital card | Spend Planner, Petal Leap, digital card | Road assistance, travel assistance, rental insurance, warranty coverage, and price protection |
Petal® 1 “No Annual Fee” Visa® Credit Card vs. Petal® 2 "Cash Back, No Fees" Visa® Credit Card
Is the Petal 1 or Petal 2 better? That really depends on your credit score and experience with borrowing. While you can qualify for the Petal 1 card with a poor to fair credit score, you need a fair to good credit score to qualify for the Petal 2.
But if you are eligible for the Petal 2, you’ll enjoy perks like no late payment fee and a lower APR of between 17.74% - 31.74% Variable. The Petal 2 also offers a higher maximum credit limit of $10,000 and also does not require a security deposit.
This card is more rewarding than the Petal 1 too. Users can earn 1% cash back on all purchases and an extra 1.5% for making their card payments on time.
Indigo® Mastercard®
The Indigo® Platinum Mastercard® is often put in the same category as the Petal 1 card because it’s also for people with below-average credit and does not require a security deposit.
You can qualify with a score in the poor to fair range, but the better your score is, the more likely you are to have a $0 annual fee. Otherwise, you could pay an annual fee of up to $99. The regular APR for this credit card is 24.9% for all borrowers.
This card does not offer cash back on purchases, but it does offer a number of travel and everyday benefits. Master RoadAssist and Master rental insurance, for example, are two services offered by Mastercard to Indigo cardholders. Travel assistance services, extended warranty coverage, and price protection are included at no added cost as well.
Read our full review of the Indigo® Platinum Mastercard® here.
Should You Get the Petal 1 Visa® Credit Card?
You may be a good candidate for the Petal 1 card if you’ve never applied for a credit card before or you have bad credit.
First-time borrowers are often rejected when they apply for cards because they don’t have enough history to determine their creditworthiness, but Petal gets around this with their Cash Score. They can look at your cash flow and payment history to get a better idea of what you’d be like as a borrower.
And if your credit isn’t where you want it to be yet, you are more likely to qualify for this credit card than most others. Maybe you’ve made late payments before or carried a high balance from one statement period to the next. The Petal 1 gives you the opportunity to get back on track with responsible use.
Just note that you won’t qualify if you’ve filed for bankruptcy within 48 months of applying.
Related: The Best Credit Cards To Consider After Bankruptcy
How to Apply
If you’re ready to take the next step and get the Petal 1 Visa® Credit Card, check to see if you pre-qualify. This way, you avoid a hard pull (which dings your credit slightly) until you are more confident you’ll get approved. Just visit the Petal site to see if you have an offer. Applying for pre-approval requires only a soft pull.
Then, you can start applying. You’ll be asked for contact information, your social security number, and information about your income. The application shouldn’t take more than five minutes to complete and you’ll know if you are approved or denied almost instantly after submitting it.
You should receive your Petal 1 card in six to 10 business days of acceptance.
Summary
Is the Petal 1 Visa® Credit Card worth it? If you’re looking for a beginner credit card, definitely. There’s no annual fee and you can get approved even with no credit, so you really don’t have much to lose. And with higher credit limits and more cash back than most unsecured credit cards for poor credit, the Petal 1 is a great option for building credit.
If you have a good or excellent credit score, you can find a more rewarding credit card than the Petal 1.
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