Petal 2 “Cash Back, No Fees” Visa® Credit Card Review

Petal 2 Visa® Review

The Petal 2 Visa® is a superb unsecured starter credit card that we highly recommend.

However, despite its many advantages, it does have a couple of drawbacks. Here’s what you should consider before you apply:

• There are no fees whatsoever: The Petal 2 Visa® credit card has no annual fees, late fees, foreign transaction fees, account-opening fees, or any other fees.
• You’ll earn cashback rewards: The Petal 2 Visa® card gives you 1%–1.5% cash back rewards on all purchases. Your rewards rate depends on how long you’ve been using the card and how responsible a borrower you’ve been.
• You can’t use it for cash advances or balance transfers: You can only use the Petal 2 Visa® for purchases; you can’t move debts from your other credit cards to your Petal card, and you can’t use it for ATM cash withdrawals.
• You don’t need a credit score or SSN to apply: You may be eligible for the Petal 2 Visa® even if you have no credit history. You can also get it if you have no Social Security number, as long as you have an ITIN (Individual Taxpayer Identification Number).

Pros & Cons

Who Is the Petal 2 Visa® Best For?

The Petal 2 Visa® is most suitable for:

• New borrowers: If you’re just starting your financial journey, getting a credit card—even if you’re gainfully employed—can be difficult. Luckily, Petal will assess your application on other factors besides your credit score if you don’t yet have a borrowing history to show.
• Anyone who hates credit card fees: There are no hidden costs to trip you up with this card, as you’ll never have to pay any kind of fee, including annual fees or penalty fees.

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What the Crowd Says

The Petal 2 Visa® receives positive reviews overall. However, there’s a discrepancy between its professional and cardholder ratings; the former are better on average, so it’s possible that the Petal 2 Visa® card looks better on paper than it actually is.

Here’s how it fares in various reviews by experts and actual cardholders:

What Major Publications Say

Many publications recommend the Petal 2 Visa®, especially as a starter card or an option for borrowers with short credit histories. Almost every review comments on how accessible it is, as well as on its low fees and opportunities for rewards.

Professional reviewers have relatively few criticisms of this card. Some point out its potentially high APR and note that other options may suit certain cardholders better (e.g., students may be better off with student cards). But overall, the Petal 2 Visa® seems to be a hit with credit card experts.

What Cardholders Say

In contrast with the consistently positive professional reviews for this card, cardholder reviews are more ambivalent about the Petal 2 Visa®. Overall, it gets middling ratings on websites for customer reviews.

Common themes in cardholder reviews include:

Privacy Concerns

Several customers complain about the unusual information you’re required to submit (e.g., your bank account number) to open a Petal account. They claim that there’s no legitimate reason for Petal to need this information, and believe it constitutes a violation of your privacy.

Problems with Card Use

A number of customers say they had transactions declined—particularly larger transactions—even though they still had plenty of available credit.

Several reports from customers say that their card was locked for no apparent reason and that customer service failed to unlock their card or offer any help when they called. They claim that these problems went unresolved for several months.

Disputing Fraudulent Transactions

Several cardholders say that when they disputed payments on their Petal 2 Visa®, despite providing plenty of documentation proving that the transactions were unauthorized, Petal still insisted that they had to pay the disputed amounts.

Credit Limits

Although cardholders express satisfaction with their initial credit limits for the Petal 2 Visa®, many have complaints relating to credit limit increases.

For example, several customers complain that they only got increases as small as $50 or no increase at all. Several also expressed frustration that they couldn’t request an increase on their own; they had to wait for Petal to offer one.

There are also complaints about out-of-the-blue credit limit reductions. For example, one reviewer claims that their limit dropped from $3,000 to $1,500 for no apparent reason, and another says their limit dropped from $2,500 to just $500.

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Rates & Fees

Fees

• Annual fee: $0
• Foreign transaction fee: $0
• Late payment fee: $0
• Returned payment fee: $0

Although this card has no late payment fees, if you miss payments, Petal may freeze your card so that you can no longer use it. They can also report your late payment to the credit bureaus.

Interest Rates

• Purchase APR: 15.99% – 29.99% (variable)

APR is the annual rate of interest on a credit card. Interest is charged when you don’t pay your balance in full by the end of the billing cycle.

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Rewards

Initially, your Petal 2 Visa® will earn 1% cash back on all of your purchases. If you make six monthly payments on time, your cashback rate will increase to 1.25%. If you make 12 monthly payments on time, it will increase to 1.5%.

Additionally, you can earn 2%–10% cash back on purchases from select merchants through Petal Offers.

To redeem your rewards, you can request an account statement credit, a bank transfer, or a check mailed to you.

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Credit Limit

A high credit limit is desirable not only because it means you have more money to spend; it’s also good for your credit score. This is because your score depends partly on a metric referred to as your credit utilization rate (the proportion of your available credit limit you’re using). A higher credit limit makes it easier to keep your credit utilization low, which is better for your credit score.

Credit Limit Increases

Petal credit card holders are automatically considered for credit limit increases at regular intervals, meaning you may be offered an increase without needing to request one.

However, the Petal app gives you very specific information about steps you can take to qualify for an increase. To view their instructions, navigate to the “Leap” tab in the app.

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Benefits

The Petal 2 Visa® features several benefits:

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How to Get a Petal 2 Visa® Credit Card

Credit Score Required

Petal uses two metrics to evaluate your eligibility for the Petal 2 Visa® credit card: your credit score, if you have one, and something called your “cash score,” which is based on your income and expenses—the money you make and the bills you pay.

As mentioned, you don’t necessarily need a credit score to get approved for a Petal 2 Visa® credit card. However, regardless of whether you have a credit score, the issuer will evaluate your cash score.

Petal doesn’t specify exactly what qualification criteria your credit score and cash score need to meet. However, it says that the Petal 2 Visa® is “designed for those with fair-to-good credit or cash flow.” 1 This means not everyone will qualify, and if you have bad credit and a high debt-to-income ratio, you may be offered the Petal 1 Visa® instead.

How to Apply

You can apply for the Petal 2 Visa® card online. To do this, you first go through the pre-approval process, which only takes a few minutes (and doesn’t affect your credit score).

The pre-approval process will determine whether Petal will only let you apply for the Petal 1 Visa® (which has less favorable terms) or let you choose between the Petal 1 and Petal 2 Visa® cards.

It will also help you to decide whether it’s worth getting a hard inquiry (a mark on your credit report showing that you’ve had your credit checked) on your credit report when your Petal 2 Visa® card application is processed.

After the pre-approval process, you’ll complete the formal application, which should be quick and easy. Petal says that you’ll usually find out whether you were approved very soon after you submit your application. In some cases, though, they may need extra time to review it.

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Building Credit

Credit Reporting

After you open your Petal account, it may take a couple of months for information about your Petal account to show up on your credit report, so don’t expect your credit score to transform immediately.

The information that Petal reports includes:

• The date you opened your account
• Your credit limit
• Your balance
• Your on-time payments
• Your missed or late payments

Because of its comprehensive reporting, using your Petal 2 card responsibly can help you build better credit.

Tips for Credit Building

The Petal 2 Visa® will only help your credit if you manage your account responsibly. Here’s what you need to do to build credit with the Petal 2 Visa®.

• Pay all your bills on time: This will ensure that you don’t get any late payments on your credit report. Late payments look bad on your credit history when other lenders view it, and they can hurt your credit score, whereas timely payments do the opposite.
• Keep your spending down: As previously mentioned, your credit score is determined partly by how much of your available credit you’re using (i.e., your credit utilization rate). Spending less improves your credit utilization, which in turn helps your credit score.
• Work toward credit limit increases: A higher credit limit helps your credit score in the same way that spending less does—by making it easier to maintain a good (low) credit utilization rate. To help you get credit limit increases, Petal has a special program you can follow (which you can see by going to the “Leap” tab in the Petal app).

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FAQs

What bank issues the Petal 2 Visa®?

The Petal 2 Visa® is issued by WebBank.

Does the Petal 2 Visa® credit card have a grace period?

Yes, the Petal 2 Visa® has a grace period of 25 days. A credit card grace period is a window of time during which you can pay off your entire card balance and avoid getting any interest charges added on.

If you pay your bill in full by the due date, Petal won’t add any interest to your purchases during the grace period. However, if you carry a balance from the previous billing cycle, anything you spend during the grace period will accumulate interest at the normal rate.

Does the Petal 2 Visa® allow cash advances or balance transfers?

No, unfortunately, the Petal 2 Visa®, doesn’t allow you to perform cash advances (a transaction where you use your credit card to get cash, generally at an ATM) or balance transfers (where you move debt from one card to another).

Can I use a Petal 2 Visa® abroad?

Yes, you can use your Petal 2 Visa® card abroad or to shop on non-US websites. What’s more, Petal won’t charge any foreign transaction fees if you do.

How long does it take to get a Petal 2 Visa®?

If Petal approves you for a credit card, it should arrive in the mail within 6–10 business days.

Can you add authorized users to the Petal 2 Visa®?

No, you can’t add authorized users to the Petal 2 Visa®.

What’s the Petal 2 Visa® customer service phone number?

You can call the Petal customer service team at (855) 697-3825.

Alternatively, you can email them at [email protected] or send mail correspondence to:

Petal Card Inc.

MSC – 166931

P.O Box 105168

Atlanta, GA 30348-5168