Petal 1 “No Annual Fee” Visa® Credit Card – Review

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The Petal 1 “No Annual Fee” Visa® Credit Card is an unsecured credit card designed for new-to-credit consumers and those in the midst of building or rebuilding credit.

Petal 1’s nonexistent annual fee is just the beginning. As one of the best secured credit card alternatives on the market, Petal 1 has a host of features and capabilities worth mentioning. If you’re looking for a new entry-level credit card that doesn’t require a security deposit and won’t penalize you for a complicated credit history[1] , you owe it to yourself to take a closer look.

Key Features

These are the most important features of the Petal 1 card.

Earning Rewards

Earn between 2% and 10% cash back from select merchants. Once earned, cash back doesn’t expire as long as your account remains open and in good standing.

Redeeming Rewards

Redeem in any amount for a statement credit or for a paper check once your cash-back rewards balance hits $20 (the minimum check amount is $20).

Credit Limit

Depending on your income, creditworthiness, and other factors, your initial credit limit could be as low as $500 or as high as $5,000.

Important Fees

Petal 1 does not charge an annual fee or fee for international transactions. Possible fees include late fees up to $29 for the first late payment and $40 for any subsequent late payments, and a returned payment fee of $29.

Regular APR

The regular APR for purchases is 19.99% to 29.49%, depending on your creditworthiness, prevailing interest rates, and other factors.

Credit Bureau Reporting

Petal reports Petal 1 account information, including payment history, to all three major consumer credit reporting bureaus. This means responsible use of the card will be added to your credit history and may help to boost your credit score.

Additional Capabilities and Benefits

Additional Petal 1 capabilities and benefits include:

A mobile app that makes it easy to manage your funds, track spending, and automate payments on the go
Cash flow technology that can help new-to-credit applicants earn approval
Get preapproval within minutes without impacting your credit score

Credit Required

The Petal 1 card is designed for cardholders with average credit as well as new-to-credit consumers with no credit histories and those in the process of rebuilding credit. It’s a suitable student credit card too.

Advantages

These are the Petal 1 card’s top advantages for cardholders.

No Annual Fee. Petal 1 doesn’t charge an annual fee. That’s good news for frugal cardholders and a welcome contrast with some entry-level cards.
No Security Deposit Required. Petal 1 doesn’t require a security deposit as a condition of account opening. This is a key distinction from secured cards, which appeal to the same audience as this one.
Open to New-to-Credit Applicants. Thanks to an innovative underwriting process that considers cash flow and other noncredit factors, Petal 1 is appropriate for applicants without credit histories.
Ideal for Consumers Rebuilding Credit. Petal 1 may also be appropriate for consumers in the midst of rebuilding credit.
Cash Back on Some Transactions. The Petal 1 card earns between 2% and 10% cash back on purchases with select merchants.
No International Transaction Fee. Petal 1 doesn’t charge a fee for international transactions, so frequent international travelers can use it without fear of surcharges.
Potential for Relatively High Credit Limits. Petal 1 offers credit limits between $500 and $5,000. That’s on the high side for an entry-level credit card.
Regular Credit Bureau Reporting. Petal regularly reports account information to the three major consumer credit reporting bureaus. With timely repayments and responsible credit utilization, your Petal 1 card could help increase your credit score over time.

Disadvantages

Consider these drawbacks before applying for a Petal 1 card.

Potential for High Regular APR. Petal 1’s maximum APR is on the high side. That’s a drawback for cardholders who plan to carry balances from month to month.
No Cash Back on Most Transactions. Despite its attractive cash-back rate on certain partner purchases, Petal 1 doesn’t earn cash back on most transactions. That’s a problem for consumers looking for an everyday credit card that earns rewards.
Credit Limits Capped at $5,000. Petal 1’s maximum credit limit could be problematic for higher-income cardholders.

Final Word

The Petal 1 “No Annual Fee” Visa® Credit Card is a rarity in the world of entry-level credit cards: a no-annual-fee product that doesn’t require a security deposit and earns cash-back rewards on some transactions. Although it does have some drawbacks, including the potential for a high APR, it’s a great option for millions of would-be cardholders in the process of rebuilding their credit — and millions more who’ve never had a credit card at all.

Do you plan to apply for the Petal 1 card? Why or why not?

Published at Fri, 18 Dec 2020 00:04:40 +0000