Petal® 2 “Cash Back, No Fees” Visa® Credit Card review: Build your credit, skip the fees
Looking for a low-cost way to build your credit? This is it. Plus you’ll earn cash back in the process.
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Petal® 2 “Cash Back, No Fees” Visa® Credit Card: A credit-building tool with earning potential
The Petal® 2 “Cash Back, No Fees” Visa® Credit Card (issued by WebBank) is one of the best no annual fee cards, especially if you’re focused on building credit. Though its perks are limited, this card has a few features that stand out among cards geared toward those with limited credit histories.
Cardholders earn a respectable cash back rate on eligible purchases and are rewarded for good credit behaviors with elevated cash back earnings. The rewards structure might be complicated for credit newbies, and there are other card options for credit beginners with welcome bonuses, but overall the Petal 2 is one of the best available card options for people with no credit history.
What are the advantages and disadvantages?
- Balance transfers aren’t offered at this time, so cardholders looking to build their credit while they manage their debt won’t get as much use from this card.
- The complicated rewards structure might be a bit confusing for credit newbies. You’ll start by earning 1 percent cash back, and with 6 on-time monthly payments that rate jumps to 1.25 percent. With 12 months of on-time payments that cash back percentage jumps to 1.5 percent.
A deeper look at the current card offer
- Rewards rate: Earn 1 percent on eligible purchases or up to 1.5 percent cash back on eligible purchases when you make 12 on-time payments, plus 2 percent to 10 percent cash back at select merchants.
- Welcome offer: N/A
- Annual fee: $0
- Purchase intro APR: N/A
- Balance transfer intro APR: N/A
- Regular APR: 15.24 percent–29.24 percent variable APR
Petal 2 Visa Credit Card current welcome offer
Like most cards geared toward people with low credit scores or limited credit history, the Petal 2 card currently doesn’t have a welcome bonus offer. Instead, the Petal 2 boasts features that should appeal to people looking to build their credit history.
Cardholders can earn 1 percent cash back automatically on eligible purchases or up to 1.5 percent on eligible purchases when making 12 payments on time. Additionally, the Petal 2 card can earn you up to 2 to 10 percent cash back at select merchants through Petal Offers. It’s worth noting that you’re actually earning “Cash Back Points,” which are simply a middle-man rewards currency that can be redeemed for cash back, instead of receiving cash back directly into your pocket.
How you earn
You’ll earn 1 percent cash back on eligible purchases right away, but if you make 12 on-time payments, you can earn even more cash back on eligible purchases: up to 1.25 percent after six on-time payments or up to 1.5 percent after 12 on-time monthly payments. From time to time, you may also be able to earn “Bonus Cash Back Points” on qualifying purchases at an undisclosed higher cash back rate or alternative type of reward.
There are also opportunities to earn 2 to 10 percent cash back at select merchants with the Petal Offers program. Share your location with the Petal card app, and you’ll see nearby local businesses that have higher cash back offers. Merchant offers are automatically loaded to the Petal account, so if you spend at a selected merchant, you’ll automatically be eligible for higher cash back offers if they’re available.
How to redeem
With every purchase with the Petal 2 credit card, 1 percent of what you spend is automatically deposited into your Cash Back Wallet the following billing cycle. You can redeem the Cash Back Points in your Cash Back Wallet as a statement credit up to the amount of the current balance. If you have more than $20 available to redeem, you can also call the Petal card company to request an ACH transfer to a bank account or to request a check.
Key cardholder perks
The Petal 2 card can be a good alternative to traditional student credit cards if you want to build credit without one (or if you aren’t eligible). Similarly to student cards, you don’t need previous credit history to qualify for the Petal 2. Consider these benefits as you’re making a credit-building card selection.
Cash back benefits
Maximize the amount of cash back you earn by looking at select merchant deals that offer 2 to 10 percent cash back rewards.
There is no need to worry about foreign transaction fees when you use the Petal 2 credit card. If you’re in a pinch on the road, you’ll also have access to Visa benefits like auto rental collision insurance, theft coverage and roadside dispatch.
The Petal 2 card usage is reported to all three major credit bureaus. As you pay back what you owe on time, you can build up your credit and increase your cash back rewards stockpile. You can also use Petal’s mobile app to manage your money and receive a free credit score to track your progress.
Potentially higher credit limits
Credit limits range from $300 to $10,000, which is good news for credit builders. The higher your credit limit, the more room you’ll have to keep your credit utilization low when you make purchases and carry balances on the card. Keeping your credit utilization low can provide a boost to your credit score over time. Just keep in mind that your potential credit limit with this card is based on your creditworthiness, and a high limit is not guaranteed.
Rates and fees
The “no-fee” Petal 2 credit card has no annual fees, no foreign transaction fees, no late fees and no returned payment fees. In exchange, you can’t make balance transfers or cash advances at the moment (which technically means no fees for either of these functions either).
The variable purchase APR of 15.24 to 29.24 percent is based on creditworthiness, and can be well below the current average interest rate.
How the Petal 2 Visa Credit Card compares to other cash back credit-building cards
The Discover it® Secured vs. the Petal 2 Visa Credit Card
If you’re looking for a cash back credit card to build credit, consider the Discover it® Secured Credit Card, which earns 2 percent cash back at restaurants and gas stations on up to $1,000 in combined purchases each quarter (then 1 percent) and unlimited 1 percent cash back on all other purchases. Like the Petal 2 the Discover it Secured card has no annual fee and no foreign transaction fees. Plus, any cash back rewards you earn during the first year will be automatically matched at the end of the year. Unlike the Petal 2, this is a secured credit card, so you’ll have to put down a refundable security deposit that doubles as your credit limit.
For students, the Discover it® Student Cash Back card has cash earning options and ranks highly in student credit card reviews. Based on Discover’s cash back calendar, cardholders can earn 5 percent cash back on rotating categories when activated each quarter (up to $1,500 in purchases per quarter, then 1 percent), in categories like Amazon.com and grocery stores. This card also provides a cash back match at the end of the first year. The card has no annual fee, no foreign transaction fees and a 0 percent introductory APR period for six months on purchases (then, a 15.24 percent to 24.24 percent variable APR applies).
The Capital One QuicksilverOne Credit Card vs. the Petal 2 Visa Credit Card
The Capital One QuicksilverOne Cash Rewards Credit Card is another option for those looking to improve their credit and earn cash back. Like the Petal 2 Visa Credit Card, Capital One QuicksilverOne cardholders earn a respectable rewards rate of up to 1.5 percent cash back, but unlike the Petal 2 card, QuicksilverOne cardholders must pay a $39 annual fee and face stricter credit requirements.
Best cards to pair the Petal 2 Visa Credit Card with
Remember that it might not be a good idea to apply for other cards at the same time when you’re working on your credit, since applying for too many cards at once may temporarily hurt your credit score. It might be a better idea to use the Petal 2 card to build a credit score first, then look into additional options. After some time, as your credit improves, you can start looking into cards for good credit, including travel rewards credit cards and cash back cards that offer better cash back rates.
Bankrate’s take—Is the Petal 2 Visa Credit Card worth it?
Many credit-building cards don’t have a rewards structure. The Petal 2, on the other hand, lets you earn cash back and rewards you with a higher cash back rate for making on-time payments (which may be a good incentive to build your credit).
Students may have better options with a student credit-building card. Depending on the cash back rewards structure that works best for you, you may want to look into other cash back rewards cards as well.