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Updated on Friday, October 19, 2018
Most credit cards require you to have a credit score in order to qualify or have you make a security deposit to access credit. Fortunately, there’s a growing list of alternative options out there, including the new Petal® Visa® Credit Card — co-founded by Jason Gross, a former corporate and regulatory attorney based in New York. To differentiate itself from traditional unsecured cards, the Petal® Visa® Credit Card charges no fees and requires no credit score to qualify, however, if you do have a credit score, it will be reviewed. Applicants may be asked to link their primary bank account during the application process. And, unlike secured cards, Petal does not require an upfront cash deposit. Petal is trying to help consumers access credit that’s “simple, more honest, [and] more accessible,” Gross said.
The result is a card that stands as a solid alternative to both secured cards and unsecured credit cards. In this review, we’ll discuss what Petal is, how the card works, what we like and don’t like about the Petal® Visa® Credit Card, and provide alternative cards.
Key features of the Petal® Visa® Credit Card
- No fees — according to Petal, this card has no fees at all (that includes annual fees, late payment fees and foreign transaction fees)
- High credit limit potential — get qualified for credit limits between $500 and $10,000
- APR range – 12.99% - 29.49% Variable
What makes Petal® Visa® Credit Card different
Lack of fees. Cardholders can use the Petal® Visa® Credit Card fee-free. That means there is no annual fee, no late payment fee, no foreign transaction fee or any other fees — whatsoever. If you’re prone to incurring fees with your credit card, the Petal® Visa® Credit Card’s lack of fees can reduce the cost of using your card. The lack of fees will mean they make less money than other credit card companies, says Gross, who sits on an advisory board for the Consumer Financial Protection Bureau. Currently their goal is to put cardholders in a position to financially succeed, with the hope they can become a long term partner. The Petal® Visa® Credit Card charges a 12.99% - 29.49% Variable APR.
An education-first approach. In addition to no credit requirement and no fees, the Petal® Visa® Credit Card has a helpful feature that can allow cardholders to see the potential effects certain actions may have on their account. For example, before a cardholder carries a balance past their due date, Petal will show how much it will cost in interest charges if they carry a balance. This makes the card transparent and allows cardholders to make an educated decision on whether to carry a balance or not — however, we recommend always paying on time and in full each month, but understand there may be times when that’s not possible.
The best ways to use the Petal® Visa® Credit Card
There are several situations where the Petal® Visa® Credit Card may benefit you more than other credit cards:
If you’re looking to establish credit. The Petal® Visa® Credit Card may help people who are new to credit or who have fair credit work their way to a good credit score — as long as you practice responsible credit behavior. By following several credit tips, like paying your bill on time and in full each month and not overspending, you should see your credit score improve over time and eventually qualify for some of the best credit cards listed on our site.
If you often travel outside the U.S. This card does not charge a foreign transaction fee — typically 3% — on purchases made abroad. This can save you a good deal of money when you travel outside the U.S. For example, if you used a card with a 3% foreign transaction fee on a vacation to Italy and spent a total of $3,000 on food, merchandise and sightseeing, then you would incur a $90 fee. But, with the Petal® Visa® Credit Card, there’s no fee.
If you need a higher credit limit than secured cards offer. You’ll receive at least a $500 credit limit depending on approval, compared to other cards that may start you off with $200. Alternative cards for people who are new to credit tend to be secured cards that require deposits — typically $200 to receive a $200 credit limit — but the Petal® Visa® Credit Card is an unsecured card, so you won’t need to make a deposit to receive the above-average $500 credit limit. Depending on your creditworthiness, your limit can be as high as $10,000.
Earn rewards. Up to 1.5% cash back after making 12 on-time monthly payments, 1% cash back on eligible purchases - right away. It’s good to note that making multiple ‘on-time’ payments in a single month will not count toward the number of payments needed to increase the cash back percentage. Only on-time monthly payments count.
Alternative options to establish credit
Apply for a credit builder loan
If you struggle to be approved for a credit card or want an alternative way to establish credit, you can consider a credit builder loan. A credit builder loan is not like a typical loan, where you borrow money from a bank for a given time period. Instead, you deposit money into a CD account and you’ll repay it with fixed monthly payments over your loan term. Once you pay off your loan, you’ll receive your initial deposit back plus any interest that accrued on your account. Credit builder loans report to the credit bureaus, so if you make consistent on-time payments, you can begin building a good credit history. Just beware that credit builder loans often charge administrative fees and an APR on the amount of your loan.
If you decide to take out a credit builder loan, you can consider those provided by Self Lender. They offer credit builder loans with terms of 12 or 24 months and at various amounts — $520, $545, $1,000 or $1,663.
Go for a secured card
A secured card is just like a regular, unsecured card, but it requires you to make a security deposit — typically $200 — to access a line of credit. The deposit can be refunded if you pay off your account and close it or if you’re upgraded to an unsecured card.
Here are two of our favorite secured cards:
The Discover it® Secured is consistently our top pick for a secured card, since it provides the opportunity for cardholders to earn rewards while establishing credit. You earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically. In addition, for new cardmembers, Discover will automatically match all the cash back you earn at the end of your first year.
The Secured Mastercard® from Capital One is another option for a secured card and is ideal for people who may not have $200 available for a security deposit. This card requires a security deposit of $49, $99, or $200. And, if you qualify for the $49 or $99 deposits, you’ll still receive a $200 credit limit. You can also receive a higher credit limit — without an additional deposit — if you make your first five monthly payments on time. Read our roundups of the best secured cards with low deposit requirements and the best secured cards with no annual fees.
Apply for a no-fee credit card
This offer and/or promotion may have since changed, expired, or is no longer available.
We found one other no-fee card, the PenFed Promise Visa® Card that, according to PenFed, has no fees whatsoever like the Petal® Visa® Credit Card. This card doesn’t have rewards either, but it does offer a sign-up bonus where new cardmembers can receive a $100 statement credit when you spend $1,500 in the first 90 days from account opening. This is a great perk considering there are no rewards and sets the PenFed Promise Visa® Card apart from the Petal® Visa® Credit Card.
The bottom line
The Petal® Visa® Credit Card is a great card for people looking to save money on fees compared to other cards. When used responsibly, you can use this card to establish credit. This card is especially helpful for people who use their card outside the U.S. or are prone to missing payments since you won’t incur any fees on those actions, compared to other cards that typically charge fees. If you already have a good credit score, you should check out our roundup of the best credit cards that can help you finance new purchases, earn rewards, benefit from exclusive benefits, and more.