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Until now, credit card options for those without a credit score were limited. In many cases, people had no choice but to make an upfront deposit for a secured credit card. Or, if they were approved for an unsecured card, their spending limit may have been very low. However, the new Petal® Visa® Credit Card changes all that.
The Petal® Visa® Credit Card is ideal for those who have solid money management skills but no credit history. Applicants without a credit score can link to their bank account to prove their creditworthiness. For those approved, credit limits start at $500 and run to as much as $10,000. The card not only provides access to credit for those with no score, but it offers up to 1.5% cash back on every purchase as well as up to 10% cash back with select merchants.
Beyond that, the Petal® Visa® Credit Card comes with these additional perks:
We love that the Petal® Visa® Credit Card is not only willing to approve applicants with no credit history, but it provides them rewards to boot. Its cash back percentage is competitive with other cards, and it's designed in a way to encourage responsible money habits. All cardholders start with 1% cash back on all purchases. That amount increases to 1.25% after six on-time payments and then 1.5% after 12 on-time payments. Additionally, cardholders can earn up to 10% cash back with select merchants (the list is available via the Petal mobile app) thanks to the card's Offers program. Just use your card with any of those merchants and the extra cash back is automatic – there's no need to sign up, keep up with rotating categories or worry about a cap. Merchants included vary, but could include Gap, Casper, Lowe's Home Improvement and more.
The Petal® Visa® Credit Card also gets kudos for being fee-free and extending credit limits of up to $10,000 to new cardholders, something you won't get with a secured credit card. Petal reports to all three major credit reporting bureaus - Experian, Equifax and TransUnion - to help users build their credit score.
Another reason to like Petal® Visa® Credit Card is its security features. Cardholders can temporarily freeze their accounts at any time. Customer service is available 24/7, and Petal's user-friendly app makes it easy to track spending for both your credit card and bank account in one place.
While 1.5% cash back is similar to the standard rates offered by other cash-back cards like Chase Freedom Unlimited® and HSBC Cash Rewards Mastercard® credit card, the initial 1% cash back rate is lower than what you could get elsewhere. What's more, unlike many other rewards credit cards, there is no welcome cash back bonus available for the Petal® Visa® Credit Card.
Although the Petal® Visa® Credit Card is a great starter card for those with no credit, don't confuse it as a card for those with poor credit. If you have significant delinquencies or a bankruptcy on your record, you may not be approved.
Another potential downside of the Petal® Visa® Credit Card is that you can't use it for cash advances. Also, be aware that if you carry a balance, you'll pay an APR that currently ranges from 14.49% - 25.49% variable. That can easily wipe out any cash back rewards you earn with the card if you don't pay your balance in full each month.
|Cash Back on Gas||Cash Back on Groceries||Cash Back on Other|
|Up to 1.5% cash back after making 12 on-time monthly payments. 1% cash back on purchases right away.||Up to 1.5% cash back after making 12 on-time monthly payments. 1% cash back on purchases right away.||Up to 1.5% cash back after making 12 on-time monthly payments. 1% cash back on purchases right away.|
Neither the Petal® Visa® Credit Card nor the Citi Simplicity® Card - No Late Fees Ever charge an annual fee or late fees. Citi Simplicity® Card - No Late Fees Ever takes that one step further by promising to never assess a penalty interest rate either. However, unlike Petal, the Citi card isn't truly fee-free. It charges foreign transactions fees, cash advance fees and balance transfer fees.
What's more, Citi Simplicity® Card - No Late Fees Ever doesn't offer any rewards. It does give cardholders free access to their FICO credit score as well as the ability to choose their own payment date, but that doesn't really compete with the 1%-1.5% cash back offered by Petal® Visa® Credit Card.
Where the Citi Simplicity® Card - No Late Fees Ever does have a significant advantage over the Petal® Visa® Credit Card is in its 0% introductory APR for both purchases and balance transfers offer. The zero percent rate is good on purchases for the first 12 months after opening an account, and it extends to 21 months for balance transfers completed within the first four months. After that, the rates jump to 16.24% - 26.24% (variable) which are slightly higher than those on the Petal® Visa® Credit Card.
You won't pay an annual fee or foreign transaction fees with either the Petal® Visa® Credit Card or the Capital One® Quicksilver® Cash Rewards Credit Card. Both cards also offer unlimited 1.5% cash back although Petal requires 12 on-time payments to earn that rate while Capital One offers it immediately.
Capital One® Quicksilver® Cash Rewards Credit Card also has an advantage over the Petal® Visa® Credit Card in that comes with a welcome bonus offer. Spend $500 within the first three months of opening an account and you'll get a one-time cash back bonus of $150. Capital One also extends intro 0% APR on both purchases and balances made within the first 15 months of opening an account. The card's standard APRs are 15.49% - 25.49% (variable).
Another advantage of the Capital One® Quicksilver® Cash Rewards Credit Card is its extensive perks. In addition to allowing cardholders to redeem cash back for gift cards, statement credits or cash, the card offers extended warranty protection, 24-hour travel assistance, travel accident insurance and a host of other benefits. However, you'll need very good or excellent credit to qualify for this card.
Both the Petal® Visa® Credit Card and the Capital One® Platinum Credit Card are designed for those who don't have the excellent credit needed for other cards. While the Petal® Visa® Credit Card is designed for those with no credit, the Capital One® Platinum Credit Card requires average, fair, limited credit.
You won't get any rewards with the Capital One® Platinum Credit Card which puts it at a significant disadvantage to the Petal® Visa® Credit Card. However, it provide perks such as free credit scores and credit monitoring tools through CreditWise from Capital One. The card also promises access to a higher credit line after five on-time monthly payments. Meanwhile, the Petal® Visa® Credit Card could give you up to a $10,000 credit line right off the bat.
Another advantage of the Petal® Visa® Credit Card over the Capital One® Platinum Credit Card is its APR. While the Petal Card's APR ranges from 14.49% - 25.49% variable, Capital One® Platinum Credit Card cardholders will pay 26.74% (variable) on their balances.
The Petal® Visa® Credit Card is a good card for anyone with a limited credit history. While it doesn't come with some of the bells and whistles offered by other rewards cards, it has a solid cash back offer. Plus, it's hard to argue with any card that isn't going to charge you fees.