If you have no credit, you know that getting approved for a credit card can be challenging.
The fact is:
Credit card companies want to see that you know how to use credit wisely. That's tough to do if you're new to using credit.
In that case, you might be limited to getting a secured credit card. These cards require a cash deposit and they can sometimes have a higher APR than an unsecured card.
The good news:
Petal is changing the game for credit card approvals.
The Petal Credit Card is a simple, no-fee card that looks beyond your credit score.
This card is designed for people who have a credit history -- and those who don't.
It could be a great fit if you're completely starting from scratch from credit and you'd rather not get a secured credit card.
You'll have to link your online bank accounts.
Keep reading to learn how Petal works and whether it's right for you.
Petal Credit Card Pros & Cons
Approval Based on More Than Just a Credit Score
When you apply for a credit card, loan or another type of credit, it puts your credit score in the spotlight.
Credit scores are based on your credit reports. Together, they tell lenders:
- How good you are at paying your bills on time
- How much debt you're carrying compared to your credit limits
- How long you've been using credit
- The types of debt you have
- How often you apply for new credit
In other words, your credit score carries a lot of weight for borrowing decisions.
Petal will pull your credit report.
But, it takes some of the pressure off by looking at more than just credit scores for approval.
Petal uses a special algorithm that reviews your complete digital financial picture.
That includes your credit scores but it also covers:
- Your banking history
- Monthly bill payments
- Any debts you have
No credit score would be a barrier to getting other credit cards but it's not with Petal.
That makes it a nontraditional option.
It's appealing if you're looking for a way to start building credit, without having to put up the deposit that secured cards require.
Note: There's a difference between no credit and poor or bad credit.
If you have a low credit score because of a bankruptcy or foreclosure, you may not be able to qualify for the Petal Card.
Must Link Your Bank Account(s)
The reason that Petal is able to be so welcoming of borrowers without credit:
You must provide third-party read-only access to your online bank accounts.
Petal can see the activity and balances of your bank accounts and other loans to evaluate your credit risk.
On an ongoing basis, Petal reserves the right to change your APR and credit limits based on such activity.
Even though you may not have a history of repaying loans, you can leverage your good history:
- Consistent income
- Paying bills
- Building savings
Unfortunately, customers of certain banks may not qualify for Petal if those banks do not allow such read-only access of customer account data.
No Fees Means No Fees
If you've had a credit card before, you know that they can charge lots of fees.
Petal keeps things as simple as possible where fees are concerned.
There are no fees, period.
That includes no:
- Annual fees
- Late fees
- Foreign transaction fees
- Overlimit fees
Note: If you go over the card's stated limit, Petal may simply block the transaction. Or, your credit limit is increased to accommodate the transaction.
That's a sweet incentive to consider this card over a secured card, which can charge all those fees and more.
But, you might be asking, how does Petal make money?
Petal does charge interest, but only if you carry a balance.
Note: Petal does not allow balance transfers or cash advances.
How Petal's Interest Charges Work
Petal has an APR range for cardholders. As a general rule, the better your credit score and other financial details, the lower your rate is likely to be.
The APR range is comparable to what you could find with other cards, both unsecured and secured. You never pay interest as long as you pay your full bill on time each month.
If you carry a balance, your regular purchase APR applies.
But, Petal tells you exactly what it'll cost you in interest to carry a balance on your statement.
You can decide for yourself whether to pay in full or pay over time.
That kind of transparency is something else that makes Petal unique from other credit cards.
Even better, Petal only charges interest on balances that are past due. You won't be charged interest on new purchases if you pay those in full.
How Much Purchasing Power Does Petal Offer?
With secured credit cards, your spending limit is usually determined by your deposit. With unsecured cards, it may hinge on your credit score.
Petal offers a generous credit limit range.
It's possible to get a limit ranging from $500 up to $10,000 with the card. The average limit is between $2,000 and $3,000.
If you get approved for a smaller limit initially, you may not be stuck with it for long.
Petal routinely reviews cardmember's financials.
If you've got a bigger balance in your bank account or your income has increased, Petal could bump up your credit limit as a reward.
Building Credit With the Petal Card
While Petal doesn't fit the typical credit card mold, building credit with this card is no different than using any other card.
The best ways to grow your credit score with the Petal Card are:
- Paying your balance on time each month
- Keeping a low balance
When it comes to your credit score calculation, these two factors (payment history and credit utilization) are most important.
Improving your score matters if you want to get a car loan, buy a home or simply upgrade to another credit card at some point.
The better your score, the easier it is to get approved for new credit. And a higher score can translate to lower interest rates and better borrowing terms.
Petal makes remembering to pay on-time easy.
You can set up payment alerts ahead of your due date and link your bank account for automatic payments each month.
If you're using Petal to improve your credit, remember to check your credit score regularly to track your progress.
Petal doesn't offer free credit score access to members currently.
No Rewards Program
Many unsecured cards offer rewards when you spend. You can earn points, cash back or miles on every purchase.
Though it's less common, some secured credit cards also offer rewards. Rewards can help you save money if you're earning back some of what you spend.
The Petal Card has no rewards program at present. If your main goal is building credit history, that may not matter.
But, if you have a good credit score already, you may prefer a card that offers rewards or a large introductory sign-up bonus.
Comparing Petal to Other Credit Cards
As always, we recommend researching and comparing your options before making any financial decisions.
To help with your decision-making, here are some of the most important things to consider when reviewing different cards:
The Petal Card is primarily a credit-building card; there are no rewards or extra bells and whistles.
As you weigh card options, think about what you want most from a credit card and how well a specific card delivers.
Petal welcomes people with no credit history at all but other cards are more selective.
If you haven't checked your credit report lately, give it a peek.
That can help you narrow down which cards you have the best shot at getting approved for.
A higher credit limit can give you more flexibility.
The downside is if you're not using your card responsibly, you could easily end up with debt.
A good rule of thumb is to look for a card that offers a credit limit equal to what you could afford to pay off in full each month.
APR and fees
Cost is always a concern with any credit card, especially if you carry a balance.
Review the fees and APRs for different cards you might be eligible for to get a sense of what it'll cost over the long-term.
Card benefits and features
Rewards are a great reason to consider a credit card, but there are other things to look out for as well.
Things like free credit score access, enhanced security features or travel benefits might be on your must-have list.
If a secured credit card is on your shortlist, think carefully about the deposit. Ask yourself if you can afford to part with whatever amount of cash the card requires.
Then, look at when you can get that deposit back. And pay attention to any special rules that could cause you to forfeit your deposit.
Check the total picture when deciding which credit card to get if you're new to using credit.
You don't want to end up with a card that's a mismatch for your goals or your budget if you're paying interest and fees.
Final Verdict: Is the Petal Card a Good Choice?
Petal could be a good fit if you have zero credit history and you don't have the cash for a secured credit card deposit.
This is also a great card to consider if you're looking for a fee-friendly option.
We wouldn't suggest this card if you have an established credit history or you're trying to rebound from a past credit mistake.
People with good or excellent credit scores might be better off with a premium rewards card.
People with bad credit would likely have better approval odds for a secured card.
If you're looking for your first credit foothold, Petal is worth a closer look. Just remember to do your homework on other card options.