Building a great credit score is one of the most important things that you can do early in your financial life. When you have good credit, you can find the best rates on mortgages, student loan refinances (if that’s a good idea for you), and perhaps even more importantly you can take out the best credit cards.
With good credit, you’ll frequently qualify for 0% APR credit cards (perfect for covering a short hiatus of income that comes with switching jobs). You’ll also qualify for those amazing travel rewards credit cards with massive sign up bonuses.
But those perks come down the road. First, you have to build a great credit score. How can you do that? For most people, the answer is a credit card. But the trouble comes with getting that first card. Gas stations, retail chains (especially clothing stores), and other retailers sometimes offer credit cards. And there are a few credit cards designed just for students.
However, a lot of these cards come with high fees (including annual fees) or high interest rates. If they don’t come with those drawbacks, they usually come with tiny credit limits. In fact, the limits tend to be so low that even putting a tank of gas and a week’s worth of groceries onto your card could give you close to a 20% credit utilization ratio. Do that for four weeks, and you’re looking at an 80% utilization ratio. Since high credit utilization ratios drive your credit score down, these “starter” credit cards can keep your credit score low for longer than necessary.
Petal is a company aiming to change the world of starter credit. The Petal card is a basic no fee credit card, with moderate to high interest rates, and reasonable credit limits. It’s a decent card for college students and those starting with credit. If you don’t have a credit card right now, keep reading to decide whether Petal is the card for you.
- Petal is a basic entry level credit card
- No annual fees
- Petal Perks rewards program gives at least 1% back
12.99% - 29.49% Variable APR
$500 to $10,000
1% to 1.5% Cash Back
Sign Up Bonus
How Does Petal Work?
Petal Card has credit limits ranging from $500-$10,000. The limit will vary based on your credit history and your income. It’s common for credit card companies to extend credit up to four times your monthly income. For example, if you earn $1,000 per month, you may qualify for $4000 in credit. Petal does not disclose how credit limits are extended. That said, a credit limit of at least $500 is very reasonable for low income people with thin credit profiles.
Right now Variable APRs range from 12.99% - 29.49%. You can avoid paying interest if you pay your bill in full by the due date each month.
The Petal card doesn’t charge any fees (including late fees or overlimit fees). This makes it an ideal card for people who are still getting used to paying bills on their own. I remember getting hit with a $27 credit card late fee when I was a sophomore in college, and I was pissed. I paid my credit card bill (less than $50 as I recall) just a few hours late. Unfortunately at the time, I didn’t know that I probably could have called to ask the bank to waive the fee. Had I had the Petal card, I would have paid about a dollar of interest, but no late fee.
The Petal card has easy to understand terms and conditions. It’s designed to be a good credit card for beginners, and it delivers. Petal card is issued by WebBank, Member FDIC.
One of the big differentiators for Petal versus other entry level cards is the amount of rewards it potentially provides its users.
Petal calls its rewards program “Petal Perks”, and it allows you to earn cash back rewards points.
Your Account will be given a Cash Back Points status of 1%, 1.25%, or 1.5% on eligible purchases (except for variations caused by rounding) in accordance with
the following rules:
- Upon card activation, earn 1% Cash Back Points on Eligible Purchases;
- After six (6) on-time payments, earn 1.25% Cash Back Points on Eligible Purchases; and
- After twelve (12) on-time payments, earn 1.5% Cash Back Points on Eligible Purchases.”
You can redeem your Cash Back Points through an account statement credit or by having a check mailed to the address on file with your Card Account.
How Does Petal Stack Up to Other Beginner Credit Cards?
In general, the Petal card is an awesome card for beginners.
Compared to most “secured” credit cards which charge an annual fee and require users to put down a cash deposit, Petal is an excellent credit card. I also like that it has no annual fee, so cardholders can keep this card in their credit profile even when they have moved on to fancy rewards credit cards.
The Perks are what really make this card shine. If only it had a sign up bonus, it would be top notch, especially for beginners.
If you’re starting to build credit, it may be worthwhile to look into Petal. It’s not going to be an ideal credit card for the long run, but it’s a good card to get you started.
Use the Petal card to prove to yourself that you can be responsible with credit. Then in a few months (or years) upgrade to a rewards card or another credit card that suits your needs better.
- Annual Fees - 100
- APR - 80
- Rewards - 80
- Other - 90
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here and here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.