If you are looking to build your credit, you must often accept fewer credit card benefits and perks until you’ve established a healthy credit history. In the meantime, you may miss out on valuable perks, such as cash-back rewards. The Petal 2 Visa Credit Card, issued by WebBank, hopes to change that, offering cash back on every purchase and no annual fee, among other benefits.
The Petal 2’s perks are otherwise limited and its rewards structure might be confusing for some. Even so, it might be the right choice if you want to earn some cash back while you build your credit. Learn more about the Petal 2’s rewards and other perks to find out if it might be the right card for you.
TIME’s Take
The Petal 2 Visa Credit Card provides 1% to 1.5% cash back on every purchase—a perk that is uncommon among cards for credit builders. It also earns 2% to 10% cash back from select merchants. While it’s light on other benefits, it’s worth a look if you are still working to improve your credit.
Petal 2 Visa: Pros and Cons
Pros
- Earns cash back on every purchase.
- No annual fees, late payment fees, foreign transaction fees, or returned payment fees.
- No minimum security deposit.
Cons
- No welcome bonus or intro APR offer.
- No balance transfers or cash advances.
- Complicated rewards structure.
Who is the card for?
The Petal 2 Visa is ideal for someone with a limited credit history, as no credit score is required to apply. Petal uses its proprietary Cash Score in its approval decision—an alternative measure that considers your income, savings, and spending history. However, your approval odds may approve if your credit score is above the subprime range (620 and above).
You also need to meet basic eligibility requirements, such as being 18 or older and having a valid Social Security number or Individual Taxpayer Identification Number (ITIN). It’s also a good choice if you don’t want to put down a security deposit, as is typically required for secured credit cards.
This card is also for you if you want to avoid paying lots of fees. There are no annual fees, foreign transaction fees, returned payment fees, or late payment fees. Its variable annual percentage rate (APR) may not be the lowest of the low, but it’s still better than some we’ve seen for credit cards in this category.
Features
Features the Petal 2 Visa offers include:
Reports to credit bureaus
The Petal 2 Visa reports your activity to the three major credit bureaus—Experian, TransUnion, and Equifax. This allows you to establish a healthy credit profile with on-time payments and raise your credit score in the process.
Cheaper than most
Credit cards for credit builders often come with excessive program fees and enrollment fees. As mentioned, the Petal 2 Visa does away with all fees, aside from its purchase APR. This means you can use it without paying any fees, provided that you pay your balance in full. For credit builders, you’d be hard-pressed to find a cheaper option than the Petal 2.
Generous rewards
Those who want to earn rewards will like this card, as it earns cash back on every purchase. At first, you’ll earn a flat 1% cash back. That rate increases to 1.25% with six on-time monthly payments and 1.5% with 12 on-time payments. In addition to flat-rate cash back, you might also receive personalized offers for 2% to 10% cash back from select merchants. Lastly, you might be able to earn Bonus Cash Back Points, which accrue at a higher rate than other cash-back points on this card. Petal will notify you if and when these points become available.
High maximum credit limit
The Petal 2 Visa has credit limits ranging from $300 to $10,000. That’s exactly double the maximum for the Petal 1, and it’s among the highest limits you are likely to see for credit-builder cards. Of course, this isn’t helpful if you end up carrying a balance, but it’s nice that you might be able to cover larger purchases with this card.
Note that you probably won’t start with a $10,000 credit limit right away. However, with the Leap program, you can increase your credit limit by making six consecutive minimum monthly payments or 15% of your statement balance, whichever is greater. To be eligible for an increase, you must also prevent your VantageScore from dropping by 25 points or more.
The fine print
- Annual fee: $0
- Purchase intro APR: N/A
- Balance transfer intro APR: N/A
- Regular APR: 18.24% to 32.24% (variable)
- Cash advance fee: N/A
- Foreign transaction fee: $0
- Late fees: $0
- Returned payment fee: $0
Additional Hidden Perks
The Petal 2 Visa’s main benefits are its cash-back rewards and lack of added fees. The card is light on other perks, but it does have a few extra benefits as a Visa card:
- Cardholder inquiry service
- Lost or stolen card reporting
- Emergency card replacement and emergency cash disbursement
- Dovly Uplift
- ID Navigator by NortonLifeLock
- Zero liability
- Roadside Dispatch®
In addition to these benefits, cardholders can earn Uber credits through Visa Local Offers. All you have to do is pay with your card in the Uber app, and you can earn credits when you shop at eligible merchants.
What Could Be Improved
The Petal 2 Visa is an excellent credit-builder card overall, but there are still some things about it that could be improved. For instance, while it earns cash back on every purchase, you can also earn cash back through periodic offers and bonus cash back. This can be a lot to track, especially for someone who is new to credit card rewards.
In addition, the card doesn’t have any intro offers, like low APR or a welcome bonus. Balance transfers and cash advances are also not possible with this card. These are mostly “nice to have” features, but adding them could make this card an even more attractive choice.
Card alternatives
The bottom line
If you have limited credit but are above the subprime range, the Petal 2 Visa could be a perfect card to help you build your credit. It earns 1% cash back on every purchase, which you can increase to 1.25% or 1.5% by making six or 12 on-time monthly payments. It also has no fees other than its ongoing APR. However, its rewards structure can be confusing for some, and the card doesn’t have perks like a welcome bonus or intro APR. Overall, it’s a strong choice for those who want to earn cash back and avoid fees while building their credit.
Frequently asked questions (FAQs)
Is the Petal 2 a secured or unsecured card?
The Petal 2 Visa is unsecured, and no security deposit is required. This card may be available to those with fair credit because Petal uses a metric called Cash Score in its approval decision. In addition to your credit score, this measure considers your income, savings, and spending history.
What’s the difference between Petal 1 and Petal 2?
These two cards have many similarities, such as no annual fees and the ability to earn cash back. However, it may be easier to qualify for the Petal 1 Card if you have subprime credit. While qualifying for the Petal 2 Card may be slightly tougher, it does away with fees like late fees and returned payment fees. In addition, the Petal 2 lets you earn cash back on every purchase—a privilege you don’t get with the Petal 1.
What’s the credit limit for the Petal 2?
The Petal 2 has credit limits ranging from $300 to $10,000. This is double the limit for the Petal 1, which ranges from $300 to $5,000.
Can you increase your Petal 2 card’s credit limit?
You may be able to increase your credit limit by making six consecutive on-time monthly payments or 15% of your statement balance, whichever is greater. You must also avoid a drop in your VantageScore of 25 points or more.