Petal® 2 “Cash Back, No Fees” Visa® Credit Card review: Build your credit, skip the fees

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 the issuer rewards good credit behaviors with elevated cash back earnings. However, the rewards structure might be complicated for credit newbies, and there are other card options for credit beginners with welcome bonuses. Still, overall the Petal 2 is one of the best available card options for people with no credit history.

Quick highlights

• 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: 17.74 percent to 31.74 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 offer a welcome bonus. Instead, the Petal 2 boasts features that should appeal to people building their credit history.

Rewards rate

Cardholders can earn 1 percent cash back automatically on eligible purchases or up to 1.5 percent on eligible purchases when making 12 monthly payments on time. Additionally, the Petal 2 card can earn 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 you can redeem for cash back.

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 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 with 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 available.

How to redeem

With every Petal 2 credit card purchase, 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 call the issuer to request an ACH transfer to a bank account or a check.

The Petal 2 card can be an excellent 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 in cash back rewards.

Travel benefits

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.

Credit-building benefits

The Petal 2 card reports activity 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 may boost 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, foreign transaction fees, late fees or 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 17.74 percent to 31.74 percent is based on your credit score and the low end can be well below the current average interest rate. However, it’s a broad APR range, and you may see interest rates well above average.

Cards designed for people establishing their credit are often light on perks, rewards and typically require a deposit or annual fee. However, there are a few options similar to the Petal 2 with which cardholders can earn rewards while building their credit history. 

Petal 2 Visa Credit Card vs. Discover it® Secured Credit Card

If you want a cash back credit card to build credit, consider the Discover it® Secured Credit Card, which earns elevated rates of cash back at restaurants and gas stations on a set amount of combined purchases each quarter and unlimited 1 percent cash back on all other purchases. Like the Petal 2, the Discover it® Secured Credit Card has no annual fee or 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 card is secured, so you’ll have to put down a refundable security deposit that doubles as your credit limit.

Petal 2 Visa Credit Card vs. Capital One QuicksilverOne Credit Card

The Capital One QuicksilverOne Cash Rewards Credit Card is another option for people who want to improve their credit and earn cash back. Like the Petal 2 Visa Credit Card, QuicksilverOne cardholders earn a respectable rewards rate of up to 1.5 percent cash back. However, unlike the Petal 2 card, cardholders must pay a $39 annual fee and face stricter credit requirements, as Capital One recommends a 580 to 740 FICO credit score to apply. Despite the annual fee, the QuicksilverOne is considered a more accessible credit-building option than many secured credit cards, as it does not require a security deposit. In addition, cardholders are automatically considered for a credit line increase in as few as six months with on-time payments, potentially making it easier to keep credit utilization low.

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 better 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 at cards for good credit, including travel rewards credit cards and cash back cards that offer better cash back rates.

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 should look into other cash back rewards cards as well.