Petal, the startup credit card company, announced on Tuesday (Oct. 2) that its credit card is now available via the company’s website.
“Tens of millions of Americans have no credit score at all, and millions more have short credit histories that may not tell the whole story. That’s a problem, since building credit is a necessity for many of life’s most important milestones, like buying your first car, starting a small business or purchasing a home. And bad credit can cost as much as $250,000 over the course of your lifetime (in fees, interest and other charges),” wrote Petal in its blog post.
“Many of today’s credit systems, products and services aren’t exactly designed to help these people succeed. Starter cards often come with high-interest rates, very low limits and lots of fees. In fact, the credit card industry rakes in a whopping $50B in fees each year,” the blog post continued. “The hard truth is that many people hoping to build credit, end up building debt instead.”
According to Petal, when creating the company, the first thing they did was get rid of fees. That means no overdraft fees, late fees, international fees, annual fees or any other kind of fees.
In January, Petal raised $13 million in its mission to make credit cards accessible to those without a good credit history, reports said at the time. Petal identifies borrowers who might be good candidates for a credit card but lack an established credit history. To serve those borrowers, the service makes credit decisions based on factors beyond their credit score.
The company’s main product is a credit card, which borrowers can qualify for based on a digital record created by the company. To decide whether to offer a credit card to a borrower, the service considers factors such as income, spending and savings. Once signed up for the card, borrowers can learn their balance and the amount of interest they would pay in their next billing cycle based on projected payments. And, as the consumers grow their credit and gain access to other credit cards, Petal aims to retain them with additional offerings, such as higher limits.