Petal® 1 “No Annual Fee” Visa® Credit Card review: A secure choice for newcomers

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Snapshot

4.4

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Bottom line

It can be tough figuring out where to start on a credit-building journey, especially for people with limited credit history. If you’re not a student, but ready for an unsecured card, the Petal 1 is a low-cost, low-risk option.

Petal Image
Apply now

on Petal's secure site

Best for local cash back offers

Petal® 1 "No Annual Fee" Visa® Credit Card

Rewards rate

N/A

Annual fee

$0

Intro offer

N/A

Regular APR

20.74% - 30.24% (Variable)

Recommended Credit Score

No Credit History 

Petal® 1 “No Annual Fee” Visa® Credit Card Overview

If you’re brand-new to the world of credit scores but secured credit cards carry too many upfront costs, the Petal 1 “No Annual Fee” Visa Credit Card (issued by WebBank) can help remove barriers. Instead of just looking at your credit score, the Petal 1 Card evaluates other financial indicators like your income and bill payment behavior. With the Petal 1 card, you can earn a credit limit increase in as little as six months (terms and conditions apply), similar to the Capital One QuicksilverOne card’s six-month automatic account review (which is the shortest starting period on the market), providing an excellent kickstart to your credit-building journey.

The Petal 1 Card’s easy-to-use experience could make it a solid unsecured alternative until you build your credit to the next level. Still, you may be able to find more consistent rewards and better benefits with other starter cards—even with limited credit history—if you’re willing to settle for certain secured cards or if you qualify for a student card.

Outside of student cards, the Petal 1 card could be the next-best, low-cost, unsecured option if your financial history can’t bump you up to the Petal® 2 “Cash Back, No Fees” Visa® Credit Card.

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Bankrate insight
The Petal 1 card is good not just for people trying to rebuild their credit. It’s also a great option for international students since you don’t need a Social Security number to apply—you can use an International Taxpayer Identification Number (ITIN) instead.

What are the pros and cons?

Pros

  • No annual fee and no foreign transaction fees make it easier to learn the credit-building ropes without worrying about annual or foreign transaction fees
  • The rates and fees are surprisingly minimal for an unsecured credit card available if you have limited credit history
  • The $300 to $5,000 credit limit can start and extend higher than some rival cards’ limits

Cons

  • No consistent ongoing rewards outside the Petal Perks program, unlike some competing cards that offer full cash back programs
  • Poses higher APR and has late payment fees unlike its successor card
  • No added benefits other than what’s standard for Visa and credit-building cards, reducing its long-term value

A deeper look at the current card offer

Quick highlights

  • Rewards rate: N/A (select cash back with Petal Perks program)
  • Welcome offer: N/A
  • Annual fee: $0
  • Purchase intro APR: N/A
  • Balance transfer intro APR: N/A
  • Regular APR: 20.74 percent to 30.24 percent variable

Current welcome offer

The Petal 1 card doesn’t provide a welcome offer, which is relatively common among credit cards for people with limited credit history.

The main focus of the Petal 1 Visa is providing a stepping stone to a better card after proving your merit as a cardholder and increasing your credit score. However, since a credit-building card is a short-term tool to begin with, a card with a welcome offer can provide much more value if you don’t plan to use it as your primary credit card for more than three years or so (based on your spending).

Very few credit-building cards deliver welcome offers, but the Discover it® Secured Card is the most notable example—matching all cash back earned after your first year with the card, which essentially stacks an extra year of full rewards onto the timeline you planned for the card.

Cash back

The Petal 1 credit card doesn’t have its own consistent cash back program, but the Petal Perks program may occasionally earn you cash back at select merchants.

How you earn

The Petal Perks program works like Amex Offers and other card-linked offer programs, except you’re automatically enrolled into each Petal Perks offer without activation required. You can earn anywhere from 2 percent to 10 percent rewards on eligible purchases at participating retailers in the form of “cash back points.”

Earning rewards this way can be hit-or-miss since each offer depends on its own terms and time frame. If rewards are your game, you should switch to a more effective cash back card once you’ve built credit with your card. You can also look for a secured card with a cash back program instead, for a full rewards experience before upgrading cards. For example, the Capital One Quicksilver Secured Cash Rewards Credit Card earns unlimited 1.5 percent cash back on every purchase from the moment you activate your card.

How to redeem

Your cash back can be redeemed for a statement credit at any amount, or for a check or direct deposit starting at $20. Since these are the typical redemption options you’d have at this credit level, it’s a good option to start learning about cash back without confusing stipulations.

Other cardholder perks

Other than the Petal Perks program, the Petal 1 Card doesn’t carry many additional benefits, which is common for starter cards. When you build more credit history and establish good habits, you can start to upgrade to cards with better features, such as higher cash back rates and rewards credit cards.

However, the Petal 1 Card does offer traditional Visa perks, including:

  • Zero liability fraud protection
  • Cardholder inquiry services
  • Pay-per-use 24/7 roadside dispatch assistance
  • Lost/stolen card reporting
  • Emergency card replacement and cash disbursement
  • Visa Local Offers with Uber

However, Visa benefits can vary from card to card, so contact your issuer for the full benefits list.

How much are points worth?

These points work like cash back since they’re earned as a percentage of a dollar. Therefore, each cash back point is worth 1 cent.

Rates and fees

The Petal 1 Card is an overall low-fee card compared to other credit cards for people with limited credit history. This credit card carries no annual fee, no foreign transaction fees and a respectable interest rate (20.24 percent to 29.74 percent, variable) that can be lower than competing cards’ rates. No annual fee means no recurring cost for new cardholders to manage, and students can even take their cards abroad since there are no foreign transaction fees.

Unfortunately, the APR isn’t as competitive as its bigger sibling’s, the Petal® 2 “Cash Back, No Fees” Visa® Credit Card (13.24 percent to 27.24 percent, variable), and the Petal 2 Card doesn’t charge returned or late payment fees. However, the Petal 1 does have features like automatic payments to help avoid the Petal 1’s up to $40 late payments (which you should hopefully avoid altogether if you’re building credit).

On the bright side, the Petal 1 Card provides a $300 to $5,000 initial credit limit, which is amazing for an unsecured card in its class. Obtaining a credit limit that high off the bat can give you a low credit utilization ratio and boost your credit score if you keep a low balance.

How the Petal 1 Visa card compares to other cards for limited credit history

Jumping into the world of credit can be nerve-racking for beginners. Luckily, issuers are creating more cards designed for new credit users. But which option is best for you? For newbies learning the basics, the Petal 1 Visa is a relatively low-cost option. However, you may want to consider different credit cards if you’re looking for more substantial value, such as perks or cash back.

Petal Image

Petal® 1 "No Annual Fee" Visa® Credit Card

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4.4
Apply now

on Petal's secure site

Annual fee

$0

Intro offer

N/A

Rewards rate

N/A

Recommended credit

No Credit History
Petal Image

Petal® 2 "Cash Back, No Fees" Visa® Credit Card

Annual fee

$0

Intro offer

N/A

Rewards rate

1%–1.5%

Recommended credit

No Credit History
Discover Image

Discover it® Secured Credit Card

Annual fee

$0

Intro offer

Cashback Match™

Rewards rate

1%–2%

Recommended credit

No Credit History

Petal 1 Visa vs. Petal 2 “Cash Back, No Fees” Credit Card

The Petal 1 card is exactly as it markets itself—a starter card. Its features are mainly aimed at accessibility for people without any credit history (it doesn’t even require a Social Security number. Because it’s unsecured, there’s no security deposit required if you don’t have the money to tie up with a secured card. It also doesn’t charge an annual fee or any foreign transaction fees, so you can avoid most card costs as long as you pay off your card on time and in full. The lowest credit line it offers is $300, which is competitive for this type of card, and its upper $5,000 credit limit can be higher than the competition as well. While it doesn’t have much short-term or long-term value outside its accessibility and credit-building features (it doesn’t provide a welcome offer or a steady cash back program), the Petal 1 Visa is a good way for cardholders to learn the credit-building ropes.

However, the Petal 2 Card and its rewards blow the Petal 1 Card out of the water. Similar to Petal 1, it also has no annual, transaction, or foreign fees, but its safety net extends to waiving any late or returned payment fees—which is an uncommon perk that can be a saving grace if you’re new to credit. What’s more, there’s no security deposit requirement since the Petal 2 is also unsecured. If you might carry a balance in an emergency, the Petal 2 has a better APR as well (13.74 percent to 27.74 percent, variable).

The crown jewel of these perks is the Petal 2 card’s up to 1.5 percent cash back on all eligible purchases, which rival cards offer, and matches the standard value of full-fledged flat-rate cash back cards. However, it takes longer to warm up from 1 percent to 1.5 percent, compared to other 1.5 percent cash back cards like the Capital One QuicksilverOne Secured Cash Rewards Credit Card. To enjoy 1.5 cash back, Petal 2 requires 12 consecutive on-time monthly payments before your cash back increases—which may defeat the purpose of getting a short-term card with waived late payment fees for some cardholders. But on the other hand, you need to be a student or offer a deposit for a secured card if you’re looking for cash back on par with the Petal 2 if you have limited credit history.

Petal 1 Visa Credit Card vs. Discover it Secured Credit Card

Discover it Secured card isn’t the only secured credit card that earns cash back, but it offers perhaps the best secured card value if you plan to hop to a full-fledged, unsecured credit card once you’re able. It earns 2 percent cash back at gas stations and restaurants (up to $1,000 in combined purchases per quarter, then 1 percent) and unlimited 1 percent back on all other purchases. The Discover it Secured’s rewards advantage over the Petal 1 card is even more pronounced when you consider the card’s first-year cash back match,

Like the Petal 1 Visa, you also can become eligible for a credit limit upgrade with automatic account reviews for positive credit habits starting as soon as your seventh month. Although the Petal 1 card provides the opportunity to increase your credit limit in six months rather than just receiving an unsecured line, the Petal card’s terms don’t state specifically when your account review periods take place. Meanwhile, you know that you’ll have monthly reviews with the Discover it Secured. And starting with a security deposit on the higher end of its $200 to $2,500 range may make your credit limit higher than with the Petal, depending on your creditworthiness. If this wasn’t generous enough, Discover’s fees are even less invasive than the Petal 1 card’s fee. There aren’t any annual fees, foreign transaction fees, penalty APRs or even a fee on your first late payment (then up to $41).

The Discover it Secured card is great for beginners or people with bad credit who want safety measures in place with their card while earning cash back. Plus, Discover’s acclaimed customer service adds to the value of starting your credit-building efforts with the issuer. However, there are a few drawbacks, such as its $200 minimum security deposit and its slightly higher APR (24.49 percent, variable), so make sure you pay off your balance monthly. If you don’t want money tied up in a security deposit and need a higher potential credit limit, the Petal 1 Visa card may be a better fit for you.

Best cards to pair with the Petal 1 Visa

With the Petal 1 Visa, it’s better to focus on building your credit rather than applying for more cards to optimize your rewards spending. Every hard credit check on your report will temporarily decrease your credit score.

However, it’s not wise to cancel your Petal 1 once you qualify for a better rewards card—doing so can reduce your credit history and impact your score. Instead, focus on a card that earns rewards and pair it with the Petal 1 Visa when you’re ready to upgrade. This can be a flat-rate rewards card like the Citi® Double Cash Card or a card with no annual fee like the Capital One Platinum Credit Card.

Bankrate’s Take: Is the Petal One Visa card worth it?

The Petal 1 “No Annual Fee” Visa Credit Card is a decent low-cost choice if you’re dead set on an unsecured card and your credit score doesn’t reflect the best financial habits yet. However, the Petal 2 Card is the superior no annual fee card, if you’re eligible.

You also have a few better options if you qualify for a student credit card, or if you can afford a deposit for a secured card. Most student cards have no annual fee and may include more cash back opportunities.

Frequently Asked Questions