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Petal 1 Visa vs. Petal 2 Visa: Which is the best card for credit newbies?

Both the Petal 1 "No Annual Fee" Visa Credit Card and the Petal 2 "Cash Back, No Fees" Visa Credit Card appeal to cardholders. Here's how they compare.

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Petal (backed by the issuer WebBank) has a reputation for offering one of the best credit cards for newbies. It recently updated its credit card program with two no-annual-fee cards designed for those building credit and maybe even consumers who want to rebuild their credit.

On Oct. 1, WebBank launched the new Petal® 1 "No Annual Fee" Visa® Credit Card and the rebranded Petal® 2 "Cash Back, No Fees" Visa® Credit Card (formerly known as the Petal Visa card).

These two cards give consumers with fair to bad credit a chance to build their scores and earn cash back. The Petal 1 "No Annual Fee" Visa Credit Card is designed for those with a nonprime credit score. The Petal 2 "Cash Back, No Fees" Visa Credit Card is meant for consumers with no credit or good credit.

Cardholders who have the Petal Visa card will automatically become Petal 2 cardholders. They will get the new card design when their cards expire, or if they ask for a reissue.

Below, Select breaks down the basics of each card, including rewards, added perks and fees, so you know which is the best pick for you.

Petal 1 Visa vs. Petal 2 Visa cards

Credit requirements

Petal 1 "No Annual Fee" Visa Credit Card

The Petal 1 card is for borrowers with a non-prime credit score. When you apply, the issuer reviews your banking history, which shows proof of your income and on-time bill payments, and creates a "Cash Score" to evaluate your creditworthiness when your credit score doesn't tell the whole story.

When you apply for a Petal 1 card, you may qualify for a higher credit limit and/or better rates if your bank transaction history shows evidence of responsible financial habits.

Petal 2 "Cash Back, No Fees" Visa Credit Card

You don't have to have a credit history to be approved for the Petal 2. However, if you have a preexisting credit score, it will be factored into your application. Applicants need either no credit, average, or good credit to qualify for the Petal 2 card.

Winner

Both the Petal 1 and the Petal 2 cards make it a little easier for people with fair credit scores to apply. If you have non-prime credit, Petal 1 could be an accessible choice to help you improve your score.

Rewards and redemption

Petal 1 "No Annual Fee" Visa Credit Card

The Petal 1 card does not have a standalone, flat-rate cash back program. However, Petal 1 cardholders are automatically enrolled in the Petal Perks program, allowing them to earn between 2% and 10% cash back at participating merchants. Simply activate your Petal 1 card, download the app and share your location. Then, Petal Offers near you will pop up onto a map to show you where you can save money.

You can redeem your cash-back in the billing period after you earn them, either for a statement credit, electronic transfer or check.

Petal 2 "Cash Back, No Fees" Visa Credit Card

The Petal 2 card offers a tiered cash-back rewards program that motivates users to make their monthly payments on time. Follow the rules, and you can earn up to 1.5% on eligible purchases according to the following schedule:

  • Immediately upon card activation: earn 1%
  • After 12 on-time monthly payments: earn up to 1.5%

Cardholders are automatically enrolled and can redeem cash back as a statement credit, electronic transfer or check.

From time to time, bonus cash back may be available on certain purchases, helping you earn as much as 2% to 10% cash back from select merchants.

Winner

The Petal 2 card offers more straightforward value, with automatic 1% cash back and the ability to earn up to 1.5% after 12 months on all eligible purchases. However, both cards reward users with 2% to 10% cash back offers at participating merchants if you're willing to share your location on the Petal app and keep up with bonus opportunities through Petal Perks.

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

Fees

Petal 1 "No Annual Fee" Visa Credit Card

  • No annual fee
  • No foreign transaction fee
  • Up to $29 for first late payment, $40 for second late payment
  • 22.99% - 32.49% variable APR
  • No special financing period

Petal 2 "Cash Back, No Fees" Visa Credit Card

  • No fees whatsoever (No late fee, foreign transaction fee, annual fee, or any-other-kind-of-fee, fee)
  • 15.99% - 29.99 variable APR
  • No special financing period

Winner

The Petal 2 is the clear winner in this category, with no fees whatsoever. The Petal 1 has no annual fee or foreign transaction fee for using your credit card abroad, but you could get dinged with a late payment fee and/or returned payment fee if you don't make your payments on time. 

Added benefits

All Petal cardholders are automatically enrolled in the Petal Perks program, which allows them to earn cash back on eligible transactions and limited-time discounts through Petal Offers.

Petal also offers a handy mobile app that helps credit card newbies track their spending, automate payments and easily manage their money.

Card issuers are not required to report your behavior to the credit bureaus, but Petal reports your activity to all three major credit bureaus (Equifax, Experian, TransUnion). Using your card responsibly will help you improve your credit score over time.

Winner

It's a tie; both cards come with automatic enrollment in the Petal Perks program, allowing cardholders to earn both cash back and Petal Offers for qualifying transactions at participating merchants.

Credit limits

The credit limits for the Petal 1 range from $300 to $5,000. Meanwhile, the credit limits for the Petal 2 start at $300 and go up to $10,000. Your credit limit is determined by your creditworthiness.

Winner

Petal 2 has a higher possible credit limit, but both cards begin at $300. If you have no credit history, your first credit limit will probably be around $300. You're not guaranteed a $10,000 limit just by applying for the Petal 2.

Bottom line

Both the Petal 1 "No Annual Fee" Visa Credit Card and the Petal 2 "Cash Back, No Fees" Visa Credit Card deliver appealing benefits for those who have a non-prime credit score who want to manage their money responsibly.

The issuer evaluates new applicants based on a combination of your credit score (if applicable) and a "Cash Score" based on your bank transactions and bill pay history.

The Petal 2 comes with the most cash-back value, at up to 1.5% after 12 months, plus 2% to 10% on select transactions. However, the Petal 1 is a great credit-builder card that delivers occasional cash back at selected merchants and other perks.

Both are an excellent alternative to secured credit cards for new card users, since there are no fees or deposits required to open the cards, and you can earn cash back right away.

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® 2 "Cash Back, No Fees" Visa® Credit Card

On Petal's secure site
  • Rewards

    1% cash back on eligible purchases right away and up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments; 2% to 10% cash back at select merchants

  • Welcome bonus

    None

  • Annual fee

    $0

  • Intro APR

    None

  • Regular APR

    15.99% - 29.99% variable

  • Balance transfer fee

    N/A

  • Foreign transaction fee

    None

  • Credit needed

    Fair, Good, No Credit

See our methodology, terms apply.

Pros

  • No credit history required (if you do have a credit history, that does factor into the credit decision)
  • No fees whatsoever
  • 1% cash back on eligible purchases right away and up to 1.5% cash back on eligible purchases after making 12 on-time monthly payments; 2% to 10% cash back at select merchants
  • Credit limits range from $300 to $10,000

Cons

  • Card isn't for rebuilding credit, but it's good for building credit
  • No special financing offers
  • No welcome bonus
  • Estimated rewards earned after 1 year: $249
  • Estimated rewards earned after 5 years: $1,577

Our methodology

To determine which credit cards offer the best value, Select analyzed 234 of the most 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 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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