The Petal^® 2 Cash Back, No Fees Visa^® Credit Card is a rebranded version of the original Petal Credit Card. It’s aimed at helping consumers with n/a credit to establish credit history and build an excellent credit score through responsible behavior. If you’re just starting out on your credit journey, the Petal 2 Credit Card is a great choice for a first credit card. It even offers flat-rate cash back on your purchases.

However, if your credit score is less than stellar, Petal also issues the Petal^® 1 No Annual Fee Visa^® Credit Card, which is aimed at helping consumers with n/a credit to rebuild their credit.

The Petal cards differ from competing credit cards by using a “Cash Score” in determining your eligibility whenever possible. You’ll be asked to link a bank account so Petal can use an algorithm to analyze factors such as transaction history, money earned and money spent each month, and bills paid. This makes it easier for consumers who have responsible financial habits, but haven’t had credit before, to qualify for a card.

While many credit cards for people with little or no credit are secured cards, meaning you have to submit a deposit to the issuer, both of the Petal credit cards are unsecured — there’s no deposit required.

• Rewards

  Earn 1% cash back on eligible purchases right away, and 2% to 10% cash back at select merchants. Some beginner credit cards don’t offer rewards at all, so this is a nice feature.

• Builds credit history

  Petal reports your activity to Equifax, Experian and TransUnion, the three major consumer credit bureaus. As long as you pay on time every month and keep your utilization rate low, you can build an excellent credit score with this card.

• No fees whatsoever

  The annual fee is $0, the foreign transaction fee is none and there are no late fees  — or any other kind of fees. Even though there isn’t a late fee, you should always pay on time, as late payments are still reported to the credit bureaus and payment history accounts for 35% of your FICO Score.

• Potentially high credit limit

  If approved, the credit limit on your Petal 2 Credit Card will range from $300 to $10,000. This is a potentially high credit limit maximum — especially considering the card is aimed at people who are new to credit — and is based on Petal’s analysis of your creditworthiness once you apply.

• Reasonable APR range

  The Petal 2 Credit Card has a Variable APR between 17.99% - 31.99%. We recommend paying off your card in full every month, but if you occasionally need to roll over a balance, having a card with a lower APR can save you money. The lower end of the APR range is competitive compared to many other cards, though you should know there’s no guarantee you’ll qualify for the lower rate until you apply.

• Low rewards rate at first

  This card offers the potential to earn up to 1.5% cash back after making 12 on-time monthly payments, a competitive rate for flat-rate cashback cards. However, it starts you out at just 1% back, which is low compared with many cashback cards. For consumers who are new to credit or have thin credit files, though, building a solid credit history should be more of a concern than earning rewards.

• Potentially high APR

  This card has a Variable APR between 17.99% - 31.99%. If you’re approved for an APR at the higher end of that range, be prepared for expensive interest charges if you roll a balance over from month to month.

 

If you spend a significant portion of your budget on driving and dining out, a card that offers rewards on gas and restaurant purchases might be the best fit for your wallet. One card that rewards these spending categories while also giving credit newbies the opportunity to build positive credit history is the Discover it^® Secured Credit Card. This is a secured card, meaning you must submit a security deposit in the amount of your desired credit limit (which can range from $200 to $2,500) to the issuer before getting the card. It earns 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically, and charges a $0 annual fee.

There’s also a unique sign-up bonus for new cardmembers. Discover will match all the cash back you’ve earned at the end of your first year. And after seven months, Discover will begin automatic monthly reviews of your account to see if you qualify to get your security deposit refunded and graduate to an unsecured card. Be aware that your behavior on all your credit accounts, not just those from Discover, will impact your eligibility.

If there’s a downside to this card, it’s that it has a high interest rate — a 27.99% Variable APR, to be specific. To avoid incurring interest charges, pay your card off in full every billing cycle.

The Petal 2 Credit Card, issued by WebBank Member FDIC, is a fine choice for those looking to enter the world of credit and earn a reasonable cashback rate. And since it has a $0 annual fee and doesn’t require a security deposit, it doesn’t cost you anything to carry. You can also take it outside the United States without paying extra thanks to its lack of a foreign transaction fee.

However, if you’ve had problems with your credit before and think you might get denied for the Petal 2 Credit Card, Petal also issues the Petal 1 Credit Card, which might be a better choice.

You can check on Petal’s website to see if you’re preapproved before actually applying for one of these cards. If you’re preapproved, it doesn’t mean you’re guaranteed the card, but it does mean you have a better chance of approval. Plus, checking for preapproval won’t impact your credit score like an application will. Note, however, you will have to submit a full application to get officially approved for the card, which may impact your score.