The pandemic has been tough for many, and there are millions of Americans who now need help building their credit. Still others have trouble qualifying for loans because they have very little credit history. Both groups are facing the paradox of needing a way to build credit, while having difficulty being approved for line of credit in order to do so. Petal is a smaller credit card issuer that goes beyond your traditional credit score to offer new accounts to those who are trying to build credit
Key Terms
Welcome Bonus: None
Rewards: Petal 1: None. Petal 2: 1% cash back immediately and up to 1.5% when you pay on time. Both cards offer 2% to 10% bonus cash back at select merchants.
Annual Fee: None
APR: Petal 1: 19.99% to 29.49%. Petal 2: 12.99% to 26.99%
Promotional Financing Offer: None
How These Cards Work
The Petal 1 and Petal 2 are a pair of credit cards that are designed to help build credit. Petal 1 is ideal for those who have had credit problems, or those who are new to credit or don’t have an established credit history in the U.S. Petal uses something it calls a Cash Score, in addition to a traditional credit score, to evaluate new applications. An applicant’s Cash Score is based on his or her banking history and can help applicants to qualify for a larger credit line or better credit rates.
The Petal 1 card is a simple card with no annual fee, but late fees and returned payment fees may apply. It offers a credit limit of $500 to $5,000 and includes offers of 2% to 10% cashback at select merchants. It’s APR is a bit higher than average, but that’s to be expected with a card designed for people with a limited credit history or credit problems.
The Petal 2 card also has no annual fee and is better suited for those who have a more established credit history or fewer issues with their credit. It offers cashback rewards of 1% to 1.5%, depending on your payment history, and also gives you access to offers of 2% to 10% cashback at select merchants. The Petal 2 card can also come with a credit limit of up to $10,000, and has no fees for anything, ever. It also comes with a much more competitive APR.
Advantages
Whether you’re new to credit or you’ve had credit problems, if you feel that conventional credit scores don’t accurately reflect your creditworthiness, then the Petal cards are designed just for you. It’s also nice that the Petal 1 card has very few fees, while the Petal 2 card has none at all. And with the Petal 2 card, you can earn valuable cashback.
Disadvantages
Neither of these cards will ever be mistaken for a top travel rewards card, but that’s not their purpose. Likewise, these cards don’t offer new account bonuses or even promotional financing offers. If these features are priorities to you, then you should be looking for a more conventional card from a traditional card issuer.
Alternatives
Capital Once Secured Mastercard. This is a secured card, so it’s open to people with nearly any credit profile. But at the same time, it still requires the payment of a refundable security deposit. This is a great card to build credit, and it has no annual fee.
BankAmericard from Bank of America. This card offers 18 months of interest free financing on both new purchases and balance transfers, with a 3% balance transfer fee. It offers no rewards and has no penalty interest rate, making it a very basic card for those who just want to build credit. But you’re unlikely to be approved if you have significant credit problems or a very limited credit history.
Discover it Secured card. This card also requires the payment of refundable security deposit, and is available to applicants with a wide range of credit profiles. It also offers you 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter, and unlimited 1% cash back on all other purchases. There’s no annual fee for this card.
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