Last week, fintech company Petal added a new credit card to its wallet, the Petal 1 card. Like the original Petal Visa card, now called Petal 2, the new card is aimed at people with credit. less than stellar. However, some terms are less appealing than the Petal 2, and the company has also made it more difficult to approve the old card.
Key points to remember
- Petal has launched the Petal 1 card for people who want to build credit but have low to fair credit scores and cash flow.
- The card offers the possibility of earning money, but not on all purchases.
- The old Visa Petal card (known as Petal 2) is now aimed at people with average to good credit or cash flow.
- While the Petal 1 isn’t as impressive as the company’s first credit card, it’s still above much of the competition.
How the Petal 1 card works
The new Petal 1 card is designed for people with low to fair credit scores or cash flow. The card has no annual or foreign transaction fees, but it may charge late or return fees.
The Petal 1 also offers cash back, but only with certain merchants through the Petal Offers feature. These merchant offers are automatically added to your account, and once you qualify, you earn between 2% and 10% cashback. That said, you won’t get any ongoing reward rates on any other purchases you make.
The card comes with credit limits ranging from $ 500 to $ 5,000, depending on your ability to pay, previous credit limits, credit history, and other variables.
Most importantly, the Petal 1 does not require a security deposit, which is common with many credit cards for bad credit. So if you are just starting to earn credit or have made mistakes in the past, the Petal 1 could be a great budget choice.
Petal 1 vs. Petal 2
Petal caused a stir in the credit card industry in 2018 with the launch of its first credit card. The Petal Visa card – now the Petal 2 – has allowed people with no credit or with a limited credit history to get approved based on how they manage their money.
During the application process, people link their bank account to Petal to view their income and expenses, which Petal then uses to create a “cash score”. The business relies on this information with (or without) your credit score to make a decision.
Unlike many cards for people with lower credit scores, the original Petal card also offered an impressive array of features, including up to 1.5% cash back and no fees.
The Petal 1 card has taken its place in relation to this target audience, while the Petal 2 card is now aimed at people with good to good credit scores or cash flows. This will make it more difficult for some people.
The good news is that Petal 1 cardholders can upgrade to Petal 2 after demonstrating responsible card use over time. Until then, the Petal 1 remains a solid alternative to bolster credit to credit cards that charge high fees or require initial security deposits.