Apache is functioning normally

Many aspiring credit card users face a chicken-and-egg problem. You need a credit score, and a decent credit score in most cases, to qualify for most credit cards. But it’s hard to establish and build credit without a credit card.

The Petal® 2 “Cash Back, No Fees” Visa® Credit Card offers a way around that. It’s an unsecured cash-back credit card that doesn’t require a FICO score as a condition of approval. That means it’s an ideal first credit card for applicants who don’t want to tie up their money in a secured credit card.

The Petal 2 card isn’t right for everyone, though. Consider the whole package before you apply.

What Is the Petal 2 Card?

The Petal 2 “Cash Back, No Fees” Visa Credit Card is a rewards credit card designed for first-time credit card users and others who’ve had difficulty qualifying for unsecured credit cards in the recent past. If you’re new to credit or your credit history is limited enough that you don’t yet have a FICO score, you may still qualify for this card based on income and other noncredit factors.

Petal 2 has a straightforward cash-back rewards program that earns up to 1.5% back on everyday purchases and up to 10% back on purchases with select merchants. It has no annual fee and very few other fees. 

Petal 2 does have a high regular APR and no 0% intro APR promotion, so it’s important to pay off purchases in full each month.

What Sets the Petal 2 Card Apart?

It should already be clear that Petal 2 is not your typical credit card. It stands out from most others in several key ways:

• Doesn’t require a FICO score for approval. If you have a credit score, Petal considers it when you apply. But if you don’t, that’s not a deal-breaker. Petal simply uses noncredit factors to assess your application, like your income and employment status.
• Up to 10% back on eligible purchases. Petal 2 caps cash-back earnings at 1.5% on most purchases, but it partners with select merchants (and more all the time) that offer 2% to as much as 10% back on eligible purchases.
• Potential for a high credit limit. For an entry-level credit card, Petal 2 has an unusually high maximum credit limit — up to $10,000. Your specific credit limit depends on your income and employment status, but if you earn good money, you have a lot more leeway with this card than with most of its close competitors.
• Regular cash-back earnings based on payment history. You earn 1% cash back on most purchases to start. As you build up a history of timely payments and responsible use, your regular cash-back rate increases to 1.5%. That’s a clear incentive to use this card wisely.

Is the Petal 2 Card Legit?

Yes, the Petal 2 Card is legitimate. Though most people aren’t familiar with the Petal name, Petal 2 is backed by WebBank, an FDIC-insured U.S. financial institution that has been in business for years. The card works like any other credit card backed by a U.S.-based bank.

Key Features of the Petal 2 Card

Petal 2 has a lot in common with other rewards credit cards: a cash-back program with rules it pays to learn, a credit limit based on users’ capacity to repay purchases, and a simple fee schedule. Its application standards throw some curveballs, but they’re easy enough to understand.

Cash-Back Rewards

Petal 2 earns 1% back on all eligible purchases. After 12 months of timely payments and responsible credit use, meaning you stay within your credit limit, the rate bumps up to 1.5%. There’s also bonus cash back on purchases with select participating merchants. The bonus rate ranges from 2% up to 10%, depending on the merchant. The lineup is always changing, but some very popular brands participate, including Costco and Adidas.

After each statement closing date, Petal automatically redeems your cash-back rewards to your connected bank account. You don’t have to initiate the redemption process.

Ongoing APR

From the day you open your account, all purchases you don’t pay off by the due date accrue interest at 17.74% to 31.74% (variable) APR. That’s a higher ongoing APR than most competing credit cards, so it’s even more important that you pay off your Petal balance in full each month.

Important Fees

Petal 2 has no annual fee, late fee, returned payment fee, or foreign transaction fee. Other fees may apply for specific actions like balance transfers, but there’s no ongoing cost to use this card.

Credit Limit & Increase

Petal 2 bases your initial credit limit on your credit score (if you have one) and your ability to pay your statement balance, which depends on your income. Initial limits range as high as $10,000, though most new cardholders get approved at much lower limits — a few hundred to a couple thousand dollars.

If your initial limit is low, Petal 2 offers a clear path to a higher credit limit through its Leap program. The deal is simple: You earn a credit line increase after six months of qualifying on-time payments.

Credit Required

Petal’s underwriting standards are relaxed. If you have a FICO score, you’ll likely qualify with a score as low as 600.

If you don’t have a FICO score, Petal doesn’t consider your credit history at all, instead using noncredit factors like income and employment status. The higher your income and the longer your employment history, the better your chances of qualifying without a credit score.

Advantages

Petal 2’s biggest advantages flow from its appeal to rookie applicants and its relatively generous rewards program. For example, it:

• Requires no credit score to get approved. Petal 2 is one of the few unsecured credit cards that requires no credit score to get approved. In fact, all else being equal, it’s easier to qualify for this card if you have a steady job and no credit score than if you have a steady job and a very low credit score. 
• Requires no security deposit. As an unsecured credit card, Petal 2 requires no security deposit as a condition of account opening. If you’re still living paycheck to paycheck or close to it, this undoubtedly heightens Petal 2’s appeal.
• Has potential for a high initial credit limit. Petal 2 is unusual among credit cards marketed to first-time users for offering high initial credit limits to qualified applicants. If your income and employment status allow, you could qualify for a credit limit as high as $10,000 right out of the gate with Petal 2.
• No annual fee. Petal 2 has no annual fee. It costs nothing to keep this card in your wallet, no matter how infrequently you use it.
• Up to 10% cash back with select merchants. Petal partners with select merchants to offer up to 10% cash back on Petal 2 purchases. Some partners are quite popular, among them Costco and Sam’s Club.
• No late or returned payment fee. Petal 2 charges no fees for late or returned payments, though repeatedly missing or bouncing payments could lead to account closure.
• No foreign transaction fees. Petal 2 charges no fees for international transactions. That’s good news for users who travel outside the United States regularly.

Disadvantages

Petal 2’s downsides include its high cost to carry balances and a lack of any promotions for new cardholders.

• High ongoing APR. Petal 2’s variable APR (currently 17.74% to 31.74%) is higher than most competing cards. If you plan to carry a balance from month to month, look for a low-APR credit card instead.
• No sign-up bonus. Petal 2 has no sign-up bonus for new cardholders. There are plenty of entry-level credit cards that do, so that’s a notable downside.
• No 0% intro APR promotion. Petal 2 also has no 0% intro APR promotion for purchases or balance transfers. Combined with the high ongoing APR, that makes Petal 2 appropriate only for people who plan to pay off their balances every month, beginning in month one.
• Low baseline cash-back rate. Petal 2’s baseline cash-back rate tops out at 1.5%, and only reaches that threshold after a year of responsible use. The Citi Double Cash Card, another no-annual-fee cash-back card, has a flat 2% return on spending.

How the Petal 2 Card Stacks Up

Your powers of deduction have no doubt led you to conclude that Petal 2 is not the only card in the Petal family. And you’re correct — there’s also a Petal 1, known officially as the Petal 1 “No Annual Fee” Visa Credit Card. 

Petal 1 has a fair amount in common with Petal 2, and both are appropriate for people with limited credit histories. But they’re different enough to warrant a detailed head-to-head comparison.

Final Word

The Petal 2 Card is one of the best entry-level cash-back credit cards on the market. Notable benefits include the opportunity to earn up to 10% back on select purchases, a nontraditional framework that requires no FICO score, and the potential for high initial credit limits.

Petal 2 isn’t perfect, though. It has no sign-up bonus or 0% intro APR promotion for new cardholders, mediocre-at-best 1.5% base cash back, and a high ongoing APR. If you’re looking for an above-average return on everyday spending or a generous incentive to make big purchases during your first months as a cardholder, you can do better elsewhere — if you can qualify for a more generous card. If not, Petal 2 is your stepping stone to get it.