Disclaimer: This post contains references to products from one or more of our advertisers. We may receive compensation (at no cost to you) when you click on links to those products. Read our Disclaimer Policy for more information.
Until recently, finding a credit card that generated rewards for consumers with low credit or none at all was essentially impossible.
However, the Petal® 2 credit card offers up to 1.5% cash back, has no annual fee or deposit requirement, and doesn’t charge any fees at all.
Building credit is more transparent and rewarding than ever before. Since the Petal® 2 card does not charge an annual fee or require a deposit, applicants can truly build credit with a cash back rewards credit card.
Rewards begin at 1% on all purchases and extend it to 1.5% after 12 months of consistent payments. However, shopping at certain vendors can increase your cash back rewards rate up to 2%-10%, depending on the merchant.
Personal finance startup Petal launched the Petal® 2 credit card to help consumers build and repair their credit scores without any fees.
The Petal® 2 Credit Card set itself apart, starting with the application process. Applicants go to the Petal website, where they begin the pre-approval and application process.
Since Petal has access to a proprietary algorithm, the approval process goes beyond simply checking your credit score. It will also look at your spending, saving, and income information to determine your creditworthiness.
This is especially powerful if you do not already have a credit score, but you want to establish credit. Since this is a credit card and not a secured credit card, there is no security deposit required, and you can begin earning rewards as soon as you receive the card.
Earning cash back on an introductory credit card is almost unheard of, but the Petal® 2 credit card allows cardholders to begin earning rewards as soon as they get their credit card.
Petal Offers a tiered approach with the reward structure on the Petal® 2 Credit, which incentivizes good financial practices and increases the cash back percentage over time.
When a new cardholder receives their card, they will earn unlimited 1% cash back on all purchases for the first six months. If they pay their bill for six months consecutively with no late payments, the earning rate will jump to 1.25%. And once they pay their bill for 12 months consecutively, it will max out at unlimited 1.5% cash back on all purchases.
Various participating merchants offer increased cash back incentives for shopping, with some offering between 2% up to 10% cash back on purchases. The Petal App will tell you if there are participating merchants in your area.
Redeeming cash back is easy and straightforward. Cardholders can apply any amount of cash back to their statement balance as a statement credit; they can request a check or even a direct deposit to your bank account.
The Petal® 2 Credit Card offers some unique benefits that entry-level credit cards usually do not have:
There is no annual fee for the Petal® 2 Credit Card; instead, you may have a different interest rate depending on your creditworthiness, but you will not have to pay any fees on this credit card.
Since this is a credit card and not a secured card, you are not required to put up any money for a security deposit. This is unique in the entry-level and credit building market because most credit card issuers will either charge an annual fee to mitigate risk or require a security deposit. Petal does neither because they use their proprietary technology to decrease their risk when issuing a new card.
Yay for technology! Moments like this is what makes American innovation a beautiful sight to see!
Customers who are approved for the Petal® 2 will immediately have access to a lucrative cash back system to begin earning rewards.
Most credit cards and even introductory credit cards charge a foreign transaction fee. Foreign transaction fees can be pretty expensive, often ranging from 1% to 3%.
However, holders of the Petal® 2 credit card are not charged foreign transaction fees, making this a good choice for spending abroad.
The Petal® 2 card is entirely designed to build credit with low fees. There are no late payments or foreign transaction fees, making this card an excellent option if you are trying to build credit and avoid any fees.
Most starter credit cards require an annual fee or secured deposit to prevent defaults. The Petal® 2 card does not need either. Instead, this card offers new cardholders up to $10,000 in initial credit limits without any fees.
It is an excellent choice for consumers who are trying to build credit because it does not charge any fees and still offers a decent rewards program considering consumers with poor to fair credit can qualify.
The Petal® 2 card also reports to all three of the major credit bureaus, which is a huge plus for cardholders trying to build credit.
Since the spending and payment data are transferred to all three major credit bureaus, applying for a loan and other credit card is straightforward.
While there are some profound benefits associated with the Petal® 2 credit card, it’s not perfect, and there are a couple of downsides depending on what you are looking for:
Sign-up bonuses are one of the most powerful incentives credit card issuers have to attract new customers. There is no sign-up bonus with the Petal® 2 credit card, but since it is designed to help consumers build or repair their credit and is more accessible than most other entry-level credit cards, it makes up for the lack of a sign-up bonus.
Most credit cards have a predetermined interest rate for cash advances. However, the Petal® 2 card does not offer any cash advances at all, regardless of the cardholder’s credit score.
Since this card is primarily for building credit and helping people start their credit score from scratch, they offset the lucrative rewards structure against any riskier offerings such as a cash advance system.
The Petal® 2 credit card does require minimum monthly payments, and the minimum payment date is permanent. Some credit card issuers allow you to change your payment due date, but Petal does not.
Petal offers two different credit cards, the Petal® 2 Card and Petal 1 Visa® Credit Card. While they are both designed to help consumers build or repair credit, there are some notable differences.
Petal 1 Visa® Credit Card charges late payment fees ranging from $29 to $40. It also does not have a standard cash-back reward system; instead, cardholders can earn between 2% and 10% at participating merchants. Finally, Petal 1 Visa® Credit Card has a credit limit ranging between $500 and $5,000
Petal® 2 Credit Card has a more straightforward reward system and does not charge any fees at all. Approved applicants can immediately earn 1% cash back and up to 1.5% cash back if they pay their bill 12 months consecutively.
Both cards are excellent choices for consumers who want to build their credit score or repair a non-prime credit score. If you don’t know which one to choose, the petal website makes the application easy and will match you with the best card for your credit history and spending habits.
The Discover it® Cash Back is a robust cash back credit card that offers unlimited 1% cash back on all purchases, 5% cash back on rotating bonus categories, and a sign-up bonus that doubles the cash back you earn in your first year. This card has no annual fee, and it can be very lucrative for cardholders that can maximize the bonus categories.
The Petal® 2 Credit Card Is also a $0 annual fee credit card that generates between 1% to 1.5% cash-back on all purchases. Participating merchants can offer up to 10% cash back on purchases.
There is no introductory bonus with this credit card, but since it is aimed at helping people build or establish credit, the reward structure is very generous.
These are both great credit cards for their markets, but they are not aimed at the same customers. The Discover it® Cash Back Is an excellent choice if you want a cash back credit card and already have an established credit history.
In comparison, The Petal® 2 Credit Card Is one of the best choices if you do not have a credit history and want to build one while still earning some cash back rewards.
Since the Petal® 2 card offers cash back rewards, comparing it to another popular $0 annual fee cash back rewards credit card will help clarify the difference between credit building cards and premium Cash Back Rewards credit cards.
The Citi® Double Cash earns an unlimited 2% on all purchases. Cardholders generate 1% cash back when they swipe their car, and they earn the other 1% when they pay their balance.
Since there are no bonus categories to manage or incentive bonuses to earn, the Citi® Double Cash Card is both simple and powerful. 2% back on all purchases adds up quickly to a substantial earnings rate since it does not matter where you swipe your card.
The Petal® 2 also offers cash back rewards, which can be redeemed as a statement credit, direct deposit, or check. Once applicants are approved for the card, they immediately can earn 1% cash-back on all purchases.
Most other starter or secured credit cards do not have any rewards structure, so this is already a great deal; once the cardholder pays their balance for six months in a row, their rewards rate increases to 1.25% cash back. Once they pay their balance for 12 months, the cash back rewards rate increases to 1.5% on all purchases.
The Petal® 2 card offers cash-back rewards and no annual fee to applicants with credit and no credit. This is an extremely unique and beneficial structure for those who are seeking to build their credit.
Cardholders earn cash back rewards and do not pay any fees; the Petal® 2 card is an excellent choice for those seeking to build or establish credit.
However, if you have an established credit score and are trying to Maximize potential cash-back opportunities, you can probably find better choices on the market.
This does not make the Petal® 2 card bad since it is geared toward cardholders with no to low credit; rewards cards that require a higher credit score may be a better option.
Since the Petal® 2 card is a relatively new way to build credit, let’s discuss some of the more frequently asked questions Surrounding it:
Whether you are looking to establish credit or give your credit score a boost, The Petal® 2 credit card is an excellent choice for a few reasons.
First, there are no fees or security deposits, so you can start using it immediately once you are approved for the card. Most cards that help establish or boost credit do not offer robust rewards.
The Petal® 2 card challenges this standard by providing 1% up to 1.5% unlimited cash back, and certain merchants provide extra incentives by offering between 2% and 10% cash back.
While the Petal® 2 card may approve credit limit increases if you qualify, they are not currently taking customer limit increase applications.
The Petal® 2 credit card helps you build, establish, or repair your credit score quickly because it reports to all three major credit bureaus: Equifax, TransUnion, And Experian.
Yes, applicants with no credit history can be approved for the Petal® 2 credit card. Since the issuers use a proprietary algorithm and traditional credit scores, they can extend credit based on other factors.
The Petal® 2 credit card is indeed legit. Personal finance startup, Petal partnered with WebBank to issue the Petal® 2 credit card.
WebBank Is an FDIC-insured Bank headquartered in Utah. The backing of a state-chartered bank like WebBank legitimizes the credit card and enables Petal® 2 to work with various customers across the country.
The Petal® 2 credit card requires a hard credit check, making your credit score decrease by a few points. However, before submitting a formal application, you can go through the pre-approval process, which will require a soft credit check. If you are pre-approved, you can then apply for The Petal® 2 credit card.
Building, establishing, and repairing credit is now more accessible and more rewarding than ever before. The Petal® 2 credit card does not charge any fees, doesn’t require a security deposit, and generates rewards.
Since Petal uses a proprietary algorithm in addition to traditional credit scores, applicants with little or no credit history still have a chance to build credit because factors such as spending, income, and savings are considered during the approval process.
If you already have an established credit score and are trying to find the best rewards credit card or cash back credit card on the market, you may want to skip the Petal® 2 credit card since there are more lucrative options on the market.
Overall, if you want to build your credit and earn rewards without paying any fees, then the Petal® 2 credit card is definitely worth considering.