Petal Launches Secured Credit Card Alternative

Applicant banking history will be considered in addition to credit score

Petal credit cards

Image courtesy of Petal


The fintech company Petal added to its credit card lineup Wednesday, launching a new card for people with troubled credit histories.

The new card—called Petal 1—is available to people with fair or even poor credit scores and requires no annual fee or security deposit. Petal will consider applicant banking history alongside their credit score to assess creditworthiness. This approach gives Petal what it calls a “Cash Score” and the ability to extend credit to consumers who have subprime credit scores (a FICO score below 670) and might not have many options outside of secured cards or payday loans right now.

In response to the economic turmoil driven by the coronavirus pandemic, nearly three-quarters of lenders have tightened credit card and loan approval standards, according to the Federal Reserve. The new Petal 1 card gives struggling consumers a more accessible credit option while alternatives are sparse. 

“Petal's new card is designed to help the tens of millions of U.S. consumers left high and dry in the COVID credit crunch,” a Petal spokesperson said in an email to The Balance.

The Petal 1 is a no-annual-fee Visa card that offers cardholders credit limits of $500-$5,000, and a variable APR of 19.99%-29.49%. The interest rates are in line with the average secured card APR, but the credit limit range is better. Unlike secured credit cards, the Petal 1 Visa doesn’t require a deposit to back up the credit limit. Cardholders can also earn some cash-back rewards by shopping at partner merchants.

The original Petal Visa card, marketed to people with thin or no credit histories, has been renamed “Petal 2.” It has a new card design and a lower variable APR range. 

Petal 2—like the new Petal 1 card—charges few fees. The refreshed card offers cash back on all purchases, a lower APR range, and a higher possible credit limit than the Petal 1 card. Both cards are issued by WebBank. 

According to Petal, Petal 1 cardholders will eventually be able to graduate to the Petal 2 card after demonstrating responsible card use. Both cards are now open for applications.