The Petal 1 “No Annual Fee” Visa Credit Card caters to quality borrowers who find it difficult to get approved for traditional credit cards because they lack a credit history. Here’s a rundown of all its benefits and why it’s great for those with no credit history or nonprime credit.
Expanding access to credit for people who don’t have a credit history is a big topic these days.
This particularly applies to young adults who are new to credit, as well as older folks who are rebuilding their credit after prior mistakes. UltraFICO and Experian Boost are two prominent examples of new services addressing this challenge.
FICO recently stated that an estimated 25 million people in the U.S. are credit invisible. Credit invisibles are people with no record of credit history or simply unreported credit histories. Being credit invisible generally makes it more difficult for you to apply for a loan or get a credit card and tends to increase the cost of security deposits on things like utilities and renting an apartment.
Petal 1 “No Annual Fee” Visa Credit Card benefits
Unlike its cousin, the Petal® 2 "Cash Back, No Fees" Visa® Credit Card, the Petal 1 Visa Credit Card has no rewards program. Nevertheless, the card is good for no-credit applicants because of its high potential credit limit and fee-free (for the most part) nature.
Approval with the Petal Cash Score
Since a FICO Score is made up of payment history, credit utilization and length of credit history – all data that comes from your experience using credit – it’s nearly impossible to get approved for the best credit cards on the market without a credit score. Plus, some of the cards available for new cardholders, with their low credit limits and steep fees, make it difficult to build credit.
That’s how the Petal 1 Visa Credit Card can help. Instead of judging you based on a nonexistent (or not great) credit score, Petal takes a detailed look at an applicant’s income and expenses and develops your Petal Cash Score. This is important because being new to credit doesn’t mean you’ll be irresponsible with credit. If you’ve got a good job and healthy financial habits, pay your rent, cellphone and utility bills on time and are even saving money for a rainy day, you’re likely to be a creditworthy borrower. Petal is simply looking a little harder to find you. Because of this, financially responsible individuals with no credit have good approval odds for the Petal 1 Visa Credit Card.
High credit limit and lack of fees
A key part of building a credit score is maintaining a low credit utilization ratio (the amount of borrowed credit relative to your credit limit) to prove you don’t overspend and budget purchases well. That can be difficult to achieve if your credit limit is low, say around $2,000.
In fact, many young adults start with secured credit cards, but some of those cards’ initial credit limits start at $200, making them rather impractical.
Depending on your current financial health, you can land an initial credit limit from $300 to $5,000 (quite high for a credit-building card). And if you make on-time payments for six months, your credit limit may increase.
The Petal 1 Visa also charges no annual fee or foreign transaction fees. However, you should be diligent in budgeting your charges and paying your credit card bill on time as the card does charge a late payment fee of up to $40 and a returned payment fee of $29.
Petal Offers program and the Petal app
Though not as robust as other cash back programs, the Petal 1 Visa Credit Card offers some cash back through the Petal Offers program. When you share your location with the Petal app, you can earn 2% to 10% cash back at select merchants around you.
The other really useful aspect of the Petal cards is the mobile app. It offers helpful budgeting tools and represents interest in clear dollar terms. Petal charges relatively high interest rates for the Petal 1 card (23.74% to 33.24% variable APR), so we strongly recommend paying in full. Through the app, you can also look at your VantageScore 3.0 credit score each month and set up automatic payments.
Maximizing the Petal 1 Visa Credit Card
If you have good financial standing despite a past hiccup or no credit, you have a solid chance of being approved for the Petal 1 Visa. Whatever your assigned credit limit, be sure to manage your budget accordingly to maintain a good credit utilization ratio. To know if you’re staying on track, you can set a monthly budget and track your spending with the Petal app. Viewing your VantageScore regularly will also keep you informed about your progress in improving your credit score.
When it comes time to pay your bills, be sure to pay in full and on time. Maintaining these good credit habits will both build your credit score steadily and prevent you from paying any late fees or interest on carried-over balances. Hopefully, in six months, you’ll be eligible for an even higher credit limit.
Primarily meant for those with limited (or no) credit history or a nonprime credit score (but still solid cash flow), the Petal 1 Visa Credit Card is an excellent start for anyone seeking to improve their credit score without paying a deposit. Plus, the card comes with many advantages such as no annual fee, a potentially high initial credit limit and even cash back at select merchants to set you up for success.