Petal is a new company that provides credit cards to those who have not yet built up a traditional credit history. Instead, it uses data like how much money a person makes and spends in a month to determine what their credit limit should be.
One of the company’s co-founders, Jason Gross, explains that using a customer’s bank account history as a basis allows Petal to offer better credit limits that are often 10 times higher than competitors’ rates.
Annual Percentage Rates fall between the industry standard 14-25%, but the company has no fees of any kind, including late fees. Instead, the company generates money through interest payments and charging vendors when a customer uses their card.
Why It’s Hot:
Younger people who don’t have a credit score yet finally have a credit card option that doesn’t penalize them with high rates and fees. As Gross has noted, this is especially important since this group is disproportionately made up of minorities and immigrants who often suffer without a credit score to help them qualify for financial products.