Petal card review: A no-frills credit card that looks at you, not your credit scores

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In a Nutshell

The Petal card is a credit card for those who have a limited credit history or even none at all, and it comes with no added fees.

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For those who have no credit scores, getting a good credit card might seem next to impossible.

From the college student who has never held a credit card to the recent immigrant who has a very limited credit history, everyone can start building credit somewhere. Usually this means finding the right card that’ll help you build your credit without hurting your wallet.

So you might find yourself asking some questions. If so many credit cards require a credit history, where are you supposed to start? How exactly are you supposed to start building credit if it’s difficult to open a credit card without a credit history?

Jason Gross, CEO and co-founder of Petal, discusses this Catch 22. He says it takes credit to build credit. To fix this, his company has launched Petal. It’s created for the population of credit card users with no credit scores or scores that misrepresent their creditworthiness.

As financial expert Jo Ann Barefoot of Barefoot Innovation Group points out, “Most people with limited credit either don’t get a credit card or have to rely on products like secured cards, where they have to maintain a deposit to cover the amount they’re borrowing, usually with many limiting features.”

When your options are limited, you might not be sure which choice will actually help you build credit. “Petal is solving this by using new kinds of data. The customer gives them permission to see his or her bank account transactions, which shows cash flows. This can open up sound credit to many people who traditionally don’t qualify,” Barefoot says.

If you’re wondering which card might offer you the chance to build a credit history from scratch, the Petal card may be a good option for you.

However, you might have to wait to get it. The Petal card is now being offered by invitation only, which means you need to join a waitlist. If you already have some credit history, you might benefit more from other credit card options.

  1. The rundown: Everything we like about the Petal card
  2. Heads up: What you should consider before applying for the Petal card
  3. Do the math: How to get the most out of the Petal card
  4. The competition: How the Petal card stacks up against similar cards
  5. Bottom line: Is the Petal card right for you?

The rundown: Everything we like about the Petal card

We jumped in and highlighted the key perks behind this card. Here’s what we like about it:

No credit scores, no problem

This card is specifically designed for people who have no credit scores. Petal will look at your income and spending to analyze your “digital financial record,” Gross says. (If you do have credit scores, the company may look at them as well).

In this way, the company determines its lending risk even if you don’t have a credit profile. “We’re using machine learning to analyze all of the data points about your financial record,” Gross says. This includes taking a look at the volatility, trends and ability to afford a credit card instead relying on credit scores to determine risk. “We have no credit score minimum,” Gross says.

No fees

While most cards for those without a credit history might tack on an annual fee or require a security deposit like a secured credit card, Petal has no such card fee.

You won’t need to worry about any other fees common with most credit cards, such as a late fee or foreign transaction fee. “We make credit honest and simple by offering no fees at all,” Gross says.

Reasonable credit limit

Credit limits will be determined by your income and spending, among other things that together make up your digital financial record. The Petal card will offer credit limits between $500 and $10,000, with an average credit limit expected to be between $2,000 and $3,000. This gives far more flexibility to those who may have struggled to find a card with a reasonable credit limit because they didn’t have a credit history.

Petal also plans on checking to make sure your limit is up to date too. If the company notices that your income in your bank account has increased, it plans to bump up your credit limit.

Transparency

The Petal card seeks to give you full transparency into your account. For example, if you decide to carry a balance, you’ll see the dollar value of the interest you can expect to pay. As Gross says, “When customers schedule payments, we can tell [them] exactly how much it’ll cost to do that.” This feature will let you watch exactly how much you’re spending, so your payments plus interest won’t get away from you.

Gross said Petal’s variable annual percentage rate will range from13.99 percent to 24.99 percent on purchases. If you are charged interest on a purchase, it will be no less than 50 cents. Credit cards designed for people who don’t have credit scores can have an APR of up to 29.99 percent, so this makes Petal a competitive option.

Heads up: What you should consider before applying for the Petal card

While this card offers a credit option to those with limited or no credit, there are a few things you may want to consider before jumping on board with the Petal card:

It’s only available via waitlist

The Petal card will be available to all consumers but is now offered by invitation only. This means you need to join a waitlist, and once it’s available, Petal will notify you. When asked about the time frame for the waitlist, Gross says, “It’s all coming up very soon. The next step is working our way down the waitlist.”

He also stressed that “everyone on the waitlist will get an opportunity to apply ahead of the general public,” so there is a goal to reward those who expressed early interest in Petal. Registration for the waitlist ends March 31, 2018.

This might be a turn-off for those who need a credit card now or who don’t want to wait, as there is no official release date at the moment. You can share your private “waitlist link” in order to get an invitation more quickly, but that might be a hassle to some.

No rewards

This card won’t offer any sort of rewards program or cash back, so it really is geared toward people who just want a no-fee credit card that they can use for purchases. If you have good or excellent credit, you can find other credit cards that allow you to earn rewards for your purchases.

You’ll have to offer up your bank account information

Since Petal will use your income and spending to determine your creditworthiness, your bank account information is required so the company can analyze your financial situation. This includes your log-in credentials, a disclosure that may cause some people to hesitate.

However, the company only gets “read only” access and uses bank-level security and encryption. This means your information is not only secure but Petal will not be able to alter or change anything.

It may not be for those with bad credit

While this card is definitely geared toward those with no credit scores, Petal still looks into your finances. The company is more likely to approve those who have regular income and are able to meet month-to-month expenses.

This may mean that if you have poor credit or have been inconsistent in meeting your financial obligations in the past, you may not be approved. This is where other options like secured cards or other cards specifically designed for people with poor credit may be a better fit.

Also, the Petal card is only available to U.S. residents over the age of 18 who have a Social Security number or individual taxpayer identification number (ITIN).

Read more: How to apply for a credit card without a Social Security number.

Do the math: How to get the most out of the Petal credit card

The Petal card is really for people who want a simple no-fee option but don’t have a credit profile. Without any fees, you won’t hurt your wallet. And with regular use you can start to build a credit history to develop credit scores.

An important thing to remember is that you’ll still be charged interest on any balances carried past the date your balance is due at a variable APR of 13.99 percent to 24.99 percent. So it’s best to pay off your balance in full and on time each month and avoid the extra cost of interest to keep this card truly fee-free.

The competition: How the Petal Credit Card stacks up against similar cards

Discover it® Secured Credit Card  Best for those with a less-than-perfect credit history
Capital One® Platinum Credit Card Best for those who want to build their credit
 PenFed Promise Card Best for building your credit, with a good sign-up bonus

Discover it ® Secured Credit Card

This card may be more flexible with extending credit to not only those who have no credit scores but also anyone who might have less-than-perfect credit. However, you’ll have to put down a security deposit equal to your credit limit. The minimum security deposit is $200, while the maximum credit limit you can get approved for is $2,500. After a history of good credit card use, you may be able to get your security deposit returned while you continue to hold your card.

Capital One® Platinum Credit Card

If you have a limited credit history or want to build your credit, this card might be a good option. There is no annual fee, and you’ll get access to a higher credit limit after making your first five monthly payments on time.

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Capital One® Platinum Credit Card

From cardholders in the last year

See Details, Rates & Fees

PenFed Promise Card

Although this card doesn’t offer any rewards on your purchases, it does offer a $100 statement credit when you spend $1,500 on purchases in the first 90 days from account opening. You also won’t have to worry about any fees, so you can build your credit without hurting your wallet.


Bottom line: Is the Petal Credit Card right for you?

When you need a credit card and want to avoid any pesky fees, the Petal card could most certainly fill the bill. If you don’t have credit scores and want to build your credit history from scratch, this may be the right card for you.

With Petal, you might be able to get access to a reasonable credit limit without fees, something that you may not be able to get with other credit card options.


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