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New 'No Annual Fee' Petal credit card allows those with non-prime credit to qualify and requires no deposits

The Petal 1 "No Annual Fee" Visa Credit Card helps you build credit and earn 2% to 10% cash back from select merchants. Here are more details about this new card.

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Petal, issued by WebBank recently launched a second no-annual-fee credit card designed for those with a non-prime credit score. If you're struggling to qualify for a credit card, there's now another option that could make it easier.

With the newly launched Petal® 1 "No Annual Fee" Visa® Credit Card, credit card newbies and those with non-prime credit have a better chance of being approved. Applicants are evaluated on their credit score (if they have one), and/or a "Cash Score" based on banking history.

Credit limits start at $300 and can go up to $5,000, with no deposit required. This is a big deal considering credit cards for beginners, like secured cards, usually require a security deposit upfront that acts as the cardholder's credit limit (typically only $200).

Below, Select takes a close look at the new, Petal 1 Visa Credit Card (one of two cards in the Petal family). We break down the rewards, additional perks and fees, so you can decide if this card is right for you.

Petal 1 "No Annual Fee" Visa Credit Card review

Petal® 1 "No Annual Fee" Visa® Credit Card

On Petal's secure site
  • Rewards

    2% to 10% cash back at select merchants

  • Welcome bonus

    None

  • Annual fee

    $0

  • Intro APR

    N/A

  • Regular APR

    22.99% - 32.49% variable

  • Balance transfer fee

    N/A

  • Foreign transaction fee

    None

  • Credit needed

    Fair/Bad

See our methodology, terms apply.

Pros

  • No annual fee
  • Opportunity to earn 2% to 10% cash back at select merchants
  • Earn a credit limit increase in as little as 6 months. Terms and conditions apply.
  • No foreign transaction fees when traveling outside the U.S.
  • No security deposits required

Cons

  • No welcome bonus
  • Rewards are limited to select merchants
  • No introductory APR offer

Petal 1 "No Annual Fee" Visa Credit Card rewards

The new Petal 1 "No Annual Fee" Visa Credit Card does not offer everyday cash-back rewards like its sibling card, the Petal® 2 "Cash Back, No Fees" Visa® Credit Card.

Learn more: Petal 2 Visa Credit Card review: One of the best no-fee cards for building credit

However, the Petal Perks Program that cardholders are automatically enrolled in offers 2% to 10% cash back at select partner merchants in their area. These qualifying transactions are referred to as Petal Offers. The cash back points can be redeemed for a statement credit, ACH transfer or a check.

Once activating your Petal 1 card, download its app and share your location. Upon doing so, Petal Offer deals near you will pop up onto a map to show you where you can earn cash back.

Latest: Petal cardholders can win up to $500 by paying more than their minimum balance

Additional benefits

The biggest draw of the new Petal 1 Credit Card is that it reports to all three major credit bureaus, allowing you to build credit.

Establishing a credit history is important in your overall financial health because it enables you to more easily access loans and get approved for life milestones, like a new apartment or mortgage, in the future.

Petal's mobile app allows cardholders to manage their money, track their spending and automate their bill payments so that they never fall behind.

Fees

Like its name says, the Petal 1 "No Annual Fee" Visa Credit Card charges no yearly fees, as well as no foreign transaction fees. Late payment fees on this card can cost you up to $29 the first time and $40 for the second late payment. Besides the fact that paying your bills on time keeps your credit score high, you'll want to make sure you avoid these fees.

The new Petal 1 Credit Card has a standard variable APR of 22.99% - 32.49%  variable, based on creditworthiness. You cannot transfer existing balances onto this card as the card is primarily for credit newcomers.

If you have less-than-stellar credit and hope to do a balance transfer so you have time to pay off your debt without accruing more interest, consider the Aspire Platinum Mastercard® instead. This card gives applicants with fair credit a chance to tackle their debt faster by paying no interest for the first six months (after, 8.15% to 18.00% variable APR). That introductory, 6-month 0% APR period applies to new purchases as well.

Bottom line

Designed for people with non-prime credit, WebBank's newly launched Petal 1 "No Annual Fee" Visa Credit Card is the perfect fit if you want to build your score.

Because it doesn't charge an annual fee nor require a security deposit upfront, Petal 1 is a much less expensive alternative to a secured credit card.

For those looking to earn more rewards on their everyday spending, consider the Petal 2 "Cash Back, No Fees" Visa Credit Card. This other card in the Petal family offers 1% cash back on eligible purchases right away, up to 1.5% cash back after making 12 on-time monthly payments and 2% to 10% cash back from select merchants. While the Petal 2 accepts applicants with no credit history, if you do have credit already you'll need at least a good score to qualify.

Our methodology

To determine which credit cards offer the best value, Select analyzed popular credit cards available in the U.S. We compared each card on a range of features, including rewards, welcome bonus, introductory and standard APR, balance transfer fee and foreign transaction fees, as well as factors such as required credit and customer reviews when available. We also considered additional perks, the application process and how easy it is for the consumer to redeem points.

Select teamed up with location intelligence firm Esri. The company's data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.

Esri's data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.

Select used this budget to estimate how much the average consumer would save over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee.

While the five-year estimates we've included are derived from a budget similar to the average American's spending, you may earn a higher or lower return depending on your shopping habits.

Petal credit cards are issued by WebBank.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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