Petal, a credit card startup pioneering “Cashflow Underwriting” as an alternative to traditional credit scoring, announced on Thursday the launch of its new no-annual-fee Visa credit card, Petal 1. The new card is paired with a mobile app that will “deliver” various features, tools, and guidance for customers’ financial success.
“Many of these consumers—whose financial lives may have been thrown into disarray by sudden unemployment, unexpected medical bills, or family financial obligations—don’t qualify for mainstream credit cards. Instead, they’re forced to use predatory financial products like payday loans and auto-title loans that charge 100%+ APRs and can trap people in debt for years. Those that do qualify for cards are often required to pay steep, mandatory fees just to use their card—annual fees, activation fees and ‘monthly maintenance fees’ are the norm.”
Petal then noted that Petal 1 is also designed to give consumers with more complicated credit histories a better option, in an economy where it’s become much harder to get a credit card if your credit history is anything short of perfect. The Petal mobile app offers members access to credit score tracking, budgeting tools, subscription management, and automated payment options—everything they need to make financial progress.
“With Petal 1, credit limits are between $500 and $5,000, variable interest rates range from 19.99% to 29.49%, and members receive between 2% and 10% cash back when they shop at select merchants.”
Petal then added:
“We’re proud of that progress, but it’s not enough. So many other communities are being underserved and overcharged in today’s credit system, especially in the wake of COVID-19. With the introduction of Petal 1, we hope to help solve this problem and put many more Americans back on the path to financial success.”
The launch of Petal 1 comes just weeks after Petal raised $55 million through its Series C funding round, which was led by Valar Ventures with participation from Rosecliff Ventures, Afore Capital, RiverPark Ventures, Great Oaks Venture Capital, GR Capital, Nelstone Ventures, Abstract Ventures, Ride Ventures, The Gramercy Fund, Adventure Collective, Starta Ventures, and NFL star Kelvin Beachum, Jr.
As previously reported, Petal was founded in 2016 and is on a mission to build a different kind of financial services company with a mission to make safe and affordable credit accessible to everyone.