All About the Petal Card: A No Annual Fee Option for Building or Repairing Your Credit

Dec 17, 2018

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You might have seen ads on Facebook or Instagram for the Petal Card, a Visa card with a focus on helping people build credit. With no annual fees, foreign transaction fees, late fees or overdraft fees, it’s marketed as an option for those just starting out or trying to build their credit.

Petal is issued by Salt Lake City-based WebBank, which has a focus on helping people build credit. Petal wants to help people it deems “credit invisible”: those who have no credit history at all, as well as those whose credit histories “may not tell the whole story.” Given the recent ubiquity of ads for this card — and the fact that it’s now open to the public instead of invite-only — let’s dig into the details of the Petal Card and who could potentially find value in it.

(Photo courtesy of Petal)
(Photo courtesy of Petal)

How It Works

Everyone who applies for a Petal Card must first be preapproved, and then go through a formal approval process that involves a hard credit pull. Petal says that those with a significant history of missed payments and credit delinquency may not be approved, so don’t just assume you’ll be accepted.

While those with little to no credit history can usually get approved for a select few starter cards, options can often be slim, and sometimes the only options are secured credit cards with myriad fees and high interest rates. Instead of using credit history to determine credit worthiness, Petal connects to your bank accounts to get a sense of your digital financial record for approval purposes (an interesting approach we’ve seen in other segments of the credit card market). The company then looks at your income and the bills you pay to determine your credit line (anywhere from $500 to $10,000) and your interest rate (anywhere from 14.74% to 25.74%).

In addition to showing you your card account information, the Petal app functions as a money-management tool; it displays all your accounts in one place, giving you a visual representation of how much money you’ve been spending and how much you have left. It shows your balance, payment due date and, should you carry a balance, exactly how much it will cost in dollar terms, not just percentages. Petal really seems to be trying to help people responsibly use and manage credit.

Bottom Line

While you won’t earn points, miles or other rewards with a Petal Card, it could certainly be a good option for anyone who is new to the world of credit cards and wants to both build and practice responsible use of credit. After all, at the top of our list of Ten Commandments for Rewards Credit Cards are paying your balance in full and not missing payments, so you want to focus on these fundamentals before developing an award travel strategy. Building credit with the Petal Card could significantly improve or help establish your score and eventually give you access to those lucrative rewards cards.

On top of everything else, Petal is straightforward, user-friendly and accepted anywhere that Visa is (which is almost every merchant you’ll find that isn’t cash-only). The fact that the card also comes with relatively high credit limits and no fees is a huge positive. Despite the lack of rewards, this card is worth a look if you’re trying to get started establishing your credit history.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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