The Petal 1 Card is a credit card designed to help individuals with limited or no credit history to build credit.
Unlike many traditional credit cards that require a security deposit, the Petal 1 card uses alternative data to assess creditworthiness, offering approval to those who might otherwise struggle to qualify.
Petal is a fintech company that focuses on providing accessible credit options to a wide range of individuals, particularly those new to credit or those with less-than-perfect credit.
Reasons to Choose the Petal 1 Card
No Annual Fee
One of the most attractive features of the Petal 1 Card is its no annual fee.
This means that cardholders don’t need to worry about paying an annual charge simply for having the card.
Many other credit cards targeted at individuals with limited credit history often charge annual fees, but Petal offers an accessible solution without this burden.
Cashback Rewards
The Petal 1 Card offers a cashback rewards program, a feature that is somewhat rare for cards designed for individuals with less-than-perfect credit or those starting to build credit.
Cardholders earn 1% cashback on all purchases, and the potential to earn 1.5% cashback after making 12 on-time monthly payments.
This makes the Petal 1 Card an attractive option for those who want to earn rewards while building their credit.
No Security Deposit Required
Unlike many secured credit cards, the Petal 1 Card does not require a security deposit.
This makes it easier for individuals who may not have the funds to put down a deposit to still access credit.
It is an excellent choice for those who are new to credit and may not have a substantial credit history or savings to back up a secured card.
Alternative Data for Credit Approval
The Petal 1 Card uses alternative data (such as your income and spending history) to assess your creditworthiness, rather than relying solely on traditional credit scores.
This allows individuals with little or no credit history to qualify based on their financial behavior, making the card more inclusive.
Petal uses technology to analyze your bank account history to help determine your creditworthiness, making it possible for people to be approved without a FICO score.
No Late Fees
One unique feature of the Petal 1 Card is that it does not charge late fees for missed payments.
While it’s still important to make payments on time to avoid interest and keep your credit in good standing, the absence of late fees is a helpful perk.
This can provide some peace of mind for those who might struggle with remembering to make payments on time.
Credit Limit Increase
Petal offers the potential for a credit limit increase based on your usage and payments.
After making on-time payments for a certain period, Petal may increase your credit limit, giving you more spending power.
This increase can help improve your credit utilization ratio, which is an important factor in building your credit score.
Digital-Friendly Experience
The Petal 1 Card offers a smooth and user-friendly digital experience through its mobile app.
The app allows cardholders to manage their accounts, track their spending, and monitor their credit score.
The app also provides insights into how your credit usage impacts your score, helping you stay on track with your financial goals.
Negative Factors of the Petal 1 Card
Limited Cash Back Rate
While the Petal 1 Card does offer cashback rewards, the earning rate is relatively low compared to other cards with similar features.
Cardholders earn 1% cashback on all purchases, which can increase to 1.5% after making 12 on-time payments.
However, some other cards offer higher cashback rates on specific categories, such as groceries or dining, which may be a better option for individuals who want to maximize their rewards.
Foreign Transaction Fees
The Petal 1 Card charges a foreign transaction fee of 2% on purchases made outside of the U.S.
This can add up if you travel internationally or make purchases from international merchants.
For frequent travelers, it might be worth considering a card that doesn’t charge foreign transaction fees.
Limited Rewards Categories
The cashback rewards program on the Petal 1 Card is straightforward but limited.
Unlike some other rewards cards, it doesn’t offer rotating bonus categories or a tiered system for higher rewards in specific spending categories.
While this simplicity can be a positive for some users, others may prefer a card with more complex rewards structures for maximizing cashback.
What Are the Requirements to Apply for the Petal 1 Card?
Age Requirement
To apply for the Petal 1 Card, applicants must be at least 18 years old (or 19 in certain states). Additionally, applicants must be a U.S. resident with a valid address.
Income Requirement
The Petal 1 Card is designed for individuals with limited credit, and as such, applicants need to demonstrate a source of income.
While Petal does not have a minimum income requirement, applicants must be able to show that they can manage their credit responsibly and make payments on time.
Bank Account Requirement
Since Petal uses alternative data for approval, applicants must have a valid bank account in good standing.
Petal uses your bank account history to assess your creditworthiness, so you will need to link your bank account during the application process.
Credit History
The Petal 1 Card is intended for individuals with limited or no credit history. If you have a low credit score or no existing credit history, you may still be eligible for the card.
Petal’s use of alternative data allows it to approve applicants who might not qualify for other credit cards.
Fees and Costs
- Annual Fee: $0
- Foreign Transaction Fee: 2%
- Late Payment Fee: None
- Cash Advance Fee: 5% or $5, whichever is greater
- APR on Purchases: 19.99% to 29.99% (Variable)
- Cash Back: 1% on all purchases, increasing to 1.5% after 12 on-time payments
- Credit Limit: Starting from $500 to $5,000, based on approval
Frequently Asked Questions
How do I qualify for the Petal 1 Card?
You can qualify for the Petal 1 Card based on your income and bank account history, rather than just your credit score.
This allows those with limited or no credit history to be considered for approval.
Can I earn rewards with the Petal 1 Card?
Yes, you can earn 1% cashback on all purchases, and the cashback rate increases to 1.5% after making 12 on-time payments.
Is there an annual fee for the Petal 1 Card?
No, the Petal 1 Card does not have an annual fee, making it an affordable option for those looking to build credit.
Does the Petal 1 Card charge foreign transaction fees?
Yes, the Petal 1 Card charges a 2% foreign transaction fee for purchases made outside of the U.S.
How can I increase my credit limit with the Petal 1 Card?
Your credit limit may increase over time based on your usage and timely payments.
Petal periodically reviews your account and may offer you a higher limit if you demonstrate responsible credit behavior.
Conclusion
The Petal 1 Card is an excellent option for individuals who are new to credit or looking to rebuild their credit.
With no annual fee, cashback rewards, and the absence of late fees, it provides an accessible way to build a positive credit history.
However, the high APR and foreign transaction fees are factors to consider, particularly if you carry a balance or travel abroad frequently.
Overall, the Petal 1 Card is a great choice for anyone looking to improve their credit score while earning cashback rewards.
