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The US-based fintech, which focuses on corporate credit cards, has launched its services after raising $25 million from investors including Keith Rabois, BoxGroup, and Soma Capital, per TechCrunch. Ramp's existing customers include Ro, Candid, Better, Eight Sleep, and Truebil.
Here's a closer look at what Ramp's credit card will offer businesses, and how it compares with the wider industry:
Ramp doesn't require personal guarantees, making it an attractive option for businesses. Companies are traditionally required to provide a personal guarantee or security deposit for credit cards, which owners of young startups might be reluctant to do because they may not want to be personally liable for their business. However, much like other competitors in the space such as Brex and American Express, Ramp doesn't require personal guarantees, likely because it will rely on transactional data to make a decision about which companies to onboard. Additionally, Ramp says that it gives businesses 10-20 times higher spending limits than conventional corporate cards, per TechCrunch. The card offers users 1.5% cash back on everything. While many other credit cards have a rewards system for certain merchants and services, Ramp decided to give users the same amount of cash back no matter where they spend — giving it a competitive edge. Additionally, there are no monthly fees, foreign transaction fees, or interest. Ramp is betting on interchange fees to make money, as it gets a cut from all transactions made with the card. Additionally, it helps businesses better manage their spending. Ramp allows companies to set up as many cards as they want, with the option to set limits and spending rules for each employee — which can help firms better manage expenses. Additionally, Ramp analyzes companies' spending and alerts them if they pay for multiple subscriptions to the same service, for example. It has also integrated with accounting software providers such as Xero, QuickBooks, and Expensify to further streamline money management. And while such integrations are becoming table stakes in the fintech industry, they remain important features for businesses.
Although this is a sound offering for businesses, Ramp is entering an increasingly competitive fintech segment — and providing credit cards might not be enough. One of its most prominent fintech competitors is Brex, which joined the unicorn club just a few months after publicly launching. Moreover, Stripe launched its credit card for business customers last year, which was quickly followed by American Express rolling out a similar venture for startups. Hence, the corporate credit card segment is heating up, making it harder for new entrants like Ramp to get their feet on the ground. At the same time, Brex is looking to become a one-stop financial hub for businesses, recently revealing that it's planning to introduce insurance, lending, and treasury products. To make success in the industry more likely, Ramp should look at how it can offer similar services in addition to credit cards in the future. To do so, it should consider third-party partnerships with other fintechs, which would enable it to go to market at a quicker pace than if it were to build such services in-house. Want to read more stories like this one? Here's how to get access:
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The best credit cards for online shopping: Best for 2% cash back (1% when you buy,...The best credit cards for online shopping: Best for 2% cash back (1% when you buy, 1% when you pay): Citi® Double Cash Card Best for Amazon and Whole Foods purchases: Amazon Prime Rewards Visa Signature Card Best for Costco.com purchases: Costco Anywhere Visa® Card by Citi Bonus cash back for online shopping: Bank of America® Cash Rewards credit card Best for office supplies: Ink Business Cash℠ Credit Card Best for purchase protection: American Express Platinum Card® from American Express Bonus rewards on Zoom and Slack: Brex Corporate Card for Startups Unlike groceries, dining, and travel, online shopping isn't a common bonus category on rewards credit cards. But that doesn't mean you can't earn more than 1 point or mile per dollar you spend, or more than 1% cash back, when you buy things online. By picking the right card — and by taking advantage of online shopping portals and other deals like Amex Offers — you can actually rake in the rewards on these purchases. The best credit cards for online shopping Best for 2% cash back on everything: Citi® Double Cash Card The Citi® Double Cash Card earns 2% cash back on everything you buy: 1% cash back when you make a purchase, and another 1% back when you pay your bill. Since there are no bonus categories to keep track of, that means you can earn 2% back on your online purchases, no matter where you're shopping. The card has no annual fee, either. Best for Amazon and Whole Foods purchases: Amazon Prime Rewards Visa Signature If you want a card that offers bonus rewards on Amazon purchases, the Prime Rewards Visa Signature is a solid choice, with 5% cash back at Amazon and Whole Foods. This could be a great option if you're looking to stock up on supplies and order grocery delivery. There's no annual fee, but you need to be an Amazon Prime member. Best for Costco.com purchases: Costco Anywhere Visa® Card by Citi For Costco members who shop with the big-box retailer online, the Costco Anywhere Visa® Card by Citi could be another smart choice. It earns 2% cash back on all Costco.com and Costco purchases, in addition to 4% cash back on the first $7,000 spent on eligible gas purchases each year (then 1%), 3% cash back on restaurants and eligible travel purchases, and 1% back on everything else. The card has no annual fee, but you need a paid Costco membership. Bonus cash back for online shopping: Bank of America Cash Rewards card This is another no-annual-fee card, and it's the rare one that includes online shopping as a bonus category. You can earn 3% cash back on a category of your choice (options include online shopping portals as well as gas, dining, travel, drugstores, and home improvement/furnishings) and 2% cash back at grocery stores and wholesale clubs on up to $2,500 in combined purchases each quarter (then 1% back). If you're looking to maximize your online shopping purchases with the Bank of America Cash Rewards card, your best best would be to only use it for online shopping, and put grocery store and wholesale club purchases on another card. Best for office supplies: Ink Business Cash℠ Credit Card If you're a freelancer or a small business owner, the Ink Business Cash℠ Credit Card is a great option for earning cash back on office supplies. You'll earn 5% back on the first $25,000 spent in combined purchases at office supply stores and on internet, cable, and phone services each year (then 1% back). You'll also earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each year (then 1% back). This card has no annual fee, and if you also have a Chase card that earns Ultimate Rewards points (such as the Chase Sapphire Preferred® Card or the Ink Business Preferred® Credit Card), you can move over cash-back rewards from the Ink Business Cash to redeem them as travel points. Best for Best for purchase protection: Platinum Card® from American Express Especially if you're making a large purchase, you'll want to pay attention to what kind of purchase protection your credit card offers. The Platinum Card® from American Express has one of the most generous policies, offering up to $10,000 in coverage per occurrence and up to $50,000 in coverage per year for stolen or damaged items. You need to submit a claim within 120 days (or 90 days for New York residents) to receive reimbursement through this benefit. The card only earns 1 point per dollar on online purchases — and it has a $550 annual fee thanks to its long list of travel benefits — but you may be able to stack it with an Amex Offer to each additional cash back or rewards. Bonus rewards for Zoom and Slack: Brex Corporate Card for Startups The Brex Corporate Card for Startups is unique in a few different ways. For one, it doesn't require a credit check or a personal guarantee. It also offers bonus rewards on a variety of purchase categories — but you can only earn bonus points if it's your only corporate card. The card just launched the Brex Remote Collaboration rewards program as an alternative to its standard rewards program. If you opt into this, instead of earning bonus points on rideshares and travel booked through Brex, you'll earn 7x points on collaboration services including Zoom, Slack, GoToMeeting.com, Gong, and Monday.com. You'll also earn 3x points with food delivery services including DoorDash and Seamless. Make sure to use an online shopping portal Whenever you shop online, it's worth taking a few extra seconds to go through a shopping portal, since you can earn a ton of bonus rewards or cash back by clicking through one of these sites. Airlines and credit card issuers, along with a handful of hotel brands, operate shopping portals that award you bonus loyalty points in their respective programs when you click through from the portal to a retailer's website. For example, if you're a United flyer, you can click through the airline's MileagePlus Shopping site to earn bonus miles with Bed Bath & Beyond, Sephora, Staples, and dozens of other online shops. Online shopping portal bonuses change all the time, and not every portal partners with the same retailers. To see your best options for earning rewards, search for the retailer on Cashback Monitor or Evreward. Both of these sites show you all your different shopping portal options for earning points, miles, or cash back. Once you've decided which shopping portal you want to use, make sure you're logged into your associated loyalty program account, then find the retailer in the portal and click through. This is an easy way to maximize a credit card purchases that would otherwise only earn you 1 point or 1% cash back. Don't forget about Amex Offers and cash-back deals through Chase If you have an American Express card or a Chase card, you could be able to save extra money on your online purchases through Amex Offers and Chase Offers, respectively. Amex Offers are limited-time deals available to cardholders, letting you earn cash back or bonus Membership Rewards points when you make purchases with retailers such as Wine.com, Levi's, and Blue Apron. The offers are targeted, meaning not every cardholder will see the same deals in their account, and you need to make your purchase with the Amex card tied to a given deal in order to be eligible for cash back or bonus points. Chase Offers work similarly; if you have a Chase card like the Chase Freedom Unlimited or the Chase Sapphire Preferred, log into your account and see what offers are available. Click on any offers you want to use to add them to your account, then use the corresponding Chase card to complete your purchase. Currently, Chase Offers are limited to cash back, ranging from 10% back at H&M to 5% back at Rite Aid. Click here to see Business Insider's list of the best rewards credit cards » More credit card coverage What's the best airline credit card? The best cash-back credit cards Southwest credit card review Best rewards credit cards Join the conversation about this story » NOW WATCH: A 45-year-long study discovered trends in successful hyper-intelligent children
Table of Contents Travel rewards credit cards Cash-back credit cards Airline credit cards Hotel credit cards...Table of Contents Travel rewards credit cards Cash-back credit cards Airline credit cards Hotel credit cards Business credit cards Travel rewards credit cards First up are the cards that can get you the most value if you're willing to put in the work: rewards credit cards that earn Amex, Chase, and other bank points. You can transfer these points to various airline and hotel partners, as well as use them to book travel directly through your credit card issuer. The mega-popular Chase Sapphire Preferred Card, Chase Sapphire Reserve, American Express® Gold Card and others fall into this category. Chase Sapphire Preferred — The rewards card that started it all. For a $95 annual fee, you get 2x points on travel and dining, not to mention valuable protections like primary car rental insurance and baggage delay insurance. Read the Chase Sapphire Preferred Card review. Chase Sapphire Reserve — The premium sibling to the Sapphire Preferred has a $550 annual fee, but offers more perks like a $300 annual travel credit and 3x points on travel and dining. Read the Chase Sapphire Reserve review. American Express® Gold Card — If dining is one of your top spending categories, the Amex Gold is a great card for you. It earns 4x points at restaurants (and 4x at US supermarkets on up to $25,000 each year, then 1x) and each month you get up to $10 in statement credits when you use the card at GrubHub, Seamless, The Cheesecake Factory, Ruth's Chris Steak House, Boxed, and participating Shake Shacks. There's a $250 annual fee. Read the Amex Gold Card review. The Platinum Card® from American Express — It's one of the most premium personal credit cards out there, with a $550 annual fee and a long list of benefits. You get annual statement credits for airline incidental fees, Saks purchases, and Uber rides, and can access a variety of airport lounges including Amex's own Centurion Lounges. Read the Amex Platinum review. Capital One® Venture® Rewards Credit Card — Like the Sapphire Preferred, the Venture Rewards Card packs in a lot of benefits for a sub-$100-annual-fee card, and in this case the $95 annual fee is waived the first year. You'll earn 2x miles on all purchases, and 10x miles on hotel bookings made with the card via hotels.com/venture. You can redeem miles to cover travel purchases on your statement, or transfer them to a selection of airline programs. Read the Capital One Venture Rewards card review. American Express® Green Card — Amex recently revamped its Green card from the ground up, and the result is a great rewards card with a moderate annual fee of $150. That fee is especially easy to justify if you can use the card's annual statement credits: up to $100 toward CLEAR membership each year, and up to $100 toward airport lounge access through LoungeBuddy each year. Read the Amex Green card review. Cash-back credit cards Not everyone travels enough to make cards like the Chase Sapphire Preferred worth it. If you'd prefer to earn money back on your spending, you have plenty of great options as well. Unless otherwise specified, these cash-back cards don't have an annual fee. Wells Fargo Propel American Express® card — This is a top cash-back card thanks to its many bonus categories. You'll earn 3x points (3% cash back) on eating out and ordering in, on travel, gas stations, rideshares, and transit, and on popular streaming services, and 1% back on everything else. It's also one of the rare no-annual-fee cash-back cards to waive foreign transaction fees. Read the Wells Fargo Propel Amex card review. Chase Freedom Unlimited — This card offers a solid flat rate (1.5% back) on every purchase, and it's one of the most flexible cash-back cards around, because it gives you options. If you decide you'd like to get into travel rewards further down the line, you can combine your cash-back earnings from the Freedom Unlimited with Chase Ultimate Rewards points from a card like the Chase Sapphire Preferred to use them toward travel. Read the Chase Freedom Unlimited review. Chase Freedom — Like the Freedom Unlimited, the Chase Freedom earns cash back on every purchase. But instead of offering a flat cash-back rate, it offers 5% back on up to $1,500 spent each quarter of the year in rotating bonus categories, such as gas stations and streaming services, and 1% back on everything else. You have to activate the bonus each quarter to earn the 5% back. The Freedom's cash-back earnings can be combined with Ultimate Rewards points if you have a more premium Chase card. Read the Chase Freedom review. Blue Cash Preferred® Card from American Express — This card has a $95 annual fee, and it has some great bonus categories. These include 6% back on select US streaming services, 6% back on up to $6,000 spent at US supermarkets each year (then 1%), 3% back at US gas stations and on transit, and 1% on everything else. Read the Blue Cash Preferred Card review. Capital One® Savor® Cash Rewards Credit Card — If you want to earn extra cash back on your dining purchases, this is a good pick. The Savor card earns an unlimited 4% back on dining and entertainment, 2% back at grocery stores, and 1% back on everything else. There's a $95 annual fee that's waived the first year, and no foreign transaction fees. Read the Capital One Savor card review. Airline credit cards If you're loyal to a specific airline — or even if you just travel with the same airline multiple times a year — it could be worth holding a co-branded credit card to get a free checked bag, priority boarding, and other perks. Airline credit cards run the gamut from entry-level to premium options, and the best choice for you will depend on how frequently you travel. Alaska Airlines Visa Signature credit card — Alaska miles are very valuable, and also hard to come by. Alaska's co-branded card (with a $75 annual fee) is a great way to earn them, and you also get a companion fare each year. Read the Alaska Airlines Visa review. Gold Delta SkyMiles® Credit Card from American Express — If you fly Delta a handful of times each year, this card is a good option. It has a $95 annual fee that's waived the first year, and offers the basic airline perks like a free checked bag, priority boarding, and 2 miles per dollar on Delta purchases. Read the Gold Delta SkyMiles Amex review. Platinum Delta SkyMiles® Credit Card from American Express — For more frequent Delta flyers, the Platinum Delta Amex could make sense thanks to additional benefits like an annual companion certificate and the ability to earn Medallion Qualification Miles (MQMs) toward Delta Medallion elite Status. The card has a higher $195 annual fee, but if those perks are useful to you, it can be worth it. Read the Platinum Delta SkyMiles Amex review. Southwest Rapid Rewards Premier Credit Card — This card has a $99 annual fee, and earns 2 points per dollar on Southwest purchases. One of the top reasons to consider it — or any other Southwest credit card — is that the sign-up bonus you earn from meeting the minimum spending requirement counts toward the Southwest Companion Pass. The Companion Pass lets you designate one person to travel with you on Southwest for free (minus taxes and fees) when you have a flight booked. Read the Southwest Rapid Rewards Premier card review. Southwest Rapid Rewards Priority Credit Card — Southwest's most premium personal credit card has a $149 annual fee and comes with some valuable benefits for the frequent Southwest flyer. You get up to $75 in Southwest travel credit each year, plus four upgraded boardings per year (where available). The points you earn with this card count toward the Companion Pass as well. Read the Southwest Rapid Rewards Priority card review. United Explorer Card — United's co-branded credit card with a $95 annual fee stands out for offering bonus miles on categories other than just United purchases, and an application fee credit for up to $100 for TSA PreCheck or Global Entry. As a cardholder, you also get access to additional low-level award space, which makes it easier to stretch the miles you earn. Read the United Explorer card review. United Explorer Business Card — The business version of the Explorer card also has a $95 annual fee, and it offers bonus miles at gas stations, office supply stores, and restaurants, in addition to on United purchases. Read the United Explorer Business card review. Read more: The best airline credit cards Hotel credit cards Hotel credit cards can get you complimentary elite status, bonus points on stays, and other solid perks. As with airline credit cards, the options run the gamut from basic cards with annual fees under $100 to premium picks that offer fancier benefits. Hilton Honors Aspire Card from American Express — This card has a $450 annual fee, but if you have even just a few Hilton stays in a year it can be well worth it. You get complimentary Hilton Diamond status, which can get you free breakfast and complimentary room upgrades, and each cardmember year you'll get up to $250 in Hilton resort credits and up to $250 in airline fee credits each calendar year. Read the Hilton Aspire card review. The World of Hyatt Credit Card — Hyatt has a smaller portfolio of hotels than some of the other chains like Hilton and Marriott, but it has some great luxury properties, and there are some real sweet spots in the Hyatt award chart. This card earns you bonus points on Hyatt stays, at restaurants, on gym memberships, and more, and it gets you a free night at a Category 1-4 hotel each year. Read the World of Hyatt card review. Hilton Honors American Express Business Card — If you qualify for a small business credit card and are a Hilton loyalist, consider this card with a moderate $95 annual fee and benefits like bonus points on Hilton stays and complimentary Gold Hilton status. Read the Hilton Honors Amex Business card review. Hilton Honors American Express Surpass Card — If you don't want to pay the $450 annual fee of the Hilton Aspire card but still want to enjoy some benefits with Hilton, this card is a good option, with a moderate $95 annual fee. You get complimentary Gold Hilton status, and you'll earn 12 points per dollar on Hilton purchases. Read the Hilton Honors Surpass card review. IHG Rewards Club Premier Credit Card — This card gets you a lot in exchange for an $89 fee. Each year you get an anniversary night that you can use at hotels that cost up to 40,000 points, and you get complimentary IHG Platinum status. It often runs lucrative sign-up offers, to boot. Read the IHG Rewards Club Premier card review. Marriott Bonvoy Brilliant™ American Express® Card — Marriott's premium consumer card has a $450 annual but offers lots of benefits to justify it, like up to $300 in annual statement credits for Marriott purchases (including stays) and complimentary Marriott Gold status. Read the Marriott Bonvoy Brilliant Amex card review. Marriott Bonvoy Business™ American Express® Card — If you're a small-business user who stays at Marriott hotels when you're on the road, this card offers bonus points and complimentary Silver status to make your stay more rewarding. Read the Marriott Bonvoy Business Amex review. Business credit cards If you run your own company or even if you just have a side gig like freelancing or selling items online, a business credit card is a great way to separate your work expenses and earn rewards targeted to business spenders. Many business credit cards offer bonus points on categories like office supplies, and if you opt for a high-end card you can enjoy luxury travel benefits like airport lounge access. Capital One® Spark® Miles for Business — The Spark Miles for Business earns 2 miles per dollar on all purchases with no cap on what you can earn, and you can either redeem your miles to cover travel expenses or transfer them to airline partners like Air Canada and Singapore Airlines. There's a $95 annual fee, but it's waived the first year. Read the Spark Miles for Business review. Capital One® Spark® Cash for Business — This card is similar to the Spark Miles for Business, except it has no annual fee and earns cash back instead of miles. You'll earn 2% back on all your purchases, with no cap on how much you can earn. Read the Spark Cash for Business review. Ink Business Preferred Credit Card — This Chase Business card has one of the best sign-up bonuses around, and it offers great points-earning potential on categories like travel and online advertising for a reasonable $95 annual fee. Read the Ink Business Preferred card review. Ink Business Cash Credit Card — This no-annual-fee business card from Chase earns bonus cash back on categories like office supply stores, internet, cable, and phone services. If you pair it with a Chase card that earns Ultimate Rewards points, you can redeem the Ink Card's cash back as travel rewards with partners like British Airways and Hyatt. Read the Ink Business Cash card review. The Business Platinum® Card from American Express — The business version of the Amex Platinum Card comes with several unique benefits, including up to $200 in statement credits for Dell purchases each year, and a 35% points rebate when you book eligible air travel through Amex. There's a $595 annual fee, but it could be worth it for frequent business travelers. Read the Amex Business Platinum card review. Blue Business® Plus Credit Card from American Express — This is a great option for anyone who's looking to earn Amex points and can qualify for a business credit card. The Blue Business Plus has no annual fee, and it earns 2x points on the first $50,000 spent each year (then 1x point). Read the Blue Business Plus card review. American Express® Business Gold Card — If your business spends a lot on categories like US advertising and airfare purchased directly from airlines, the Business Gold is a great choice. It earns you 4x points on your top two spending categories each month (from a list of six categories), on up to $150,000 in combined purchases each year (then 1x). The card has a $295 annual fee. Read the Amex Business Gold card review. Ink Business Unlimited Card — This card has no annual fee, and earns a flat 1.5% back on every purchase. If you want a simple card that doesn't require keeping track of any bonus categories, this could be a good choice. Read the Ink Business Unlimited review. Brex Corporate Card for Startups and the Brex Corporate Card for Ecommerce — Brex's corporate credit card comes in two versions with slightly different benefits tailored for startups and ecommerce companies. Both flavors have no annual fee, and if you make the Brex card your exclusive corporate credit card, you can earn up to 7 points per dollar on spending, and transfer points to airlines like JetBlue. Read the Brex corporate card review. More credit card coverage What's the best airline credit card? The best cash-back credit cards Southwest credit card review Best rewards credit cards
Most people probably haven't heard of Petal, the new credit card that helps people build credit from scratch
People with thin credit files have trouble qualifying for credit cards and loans. However, you need...People with thin credit files have trouble qualifying for credit cards and loans. However, you need credit to build credit. While there are options for people who have no credit, such as secured credit cards or credit-builder loans, they tend to be costly and sometimes come with terms that are confusing and predatory. A new fintech startup recently launched Petal Card, which aims to help people build credit with a fee-free, high-limit credit card. Petal is able to offer access to credit to "credit invisibles" through analysis of other financial data such as income, spending, and savings. While Petal Card isn't the right choice for everyone, it may be one of the best credit-building tools for people with no credit. The traditional banking industry is filled with frustrating conundrums that leave much of the general population — particularly young adults, immigrants, and low-income folks — underserved. Investment planners can help you build wealth, but you need to be wealthy in order to hire one. Loans can help you cover costs when you're short on cash, but people who live paycheck-to-paycheck are likely to qualify only for the most expensive loans, while people who have never missed a bill will get the cheapest ones. Credit cards are the best way to build credit, but you need good credit to get one. The rise of fintech — made up largely by startups that use proprietary technology to streamline banking services, thereby decreasing costs and increasing access — has brought with it the disruption of almost every sector of the financial industry. The one sector that seems to have been left out is credit cards, an area still ruled by banking behemoths like JPMorgan Chase, American Express, and Bank of America. New fintech startup Petal has decided to toss its hat in the ring, and it's already set to disrupt the card industry, which is predicted to generate nearly $80 trillion in ten years. Founded in 2016, the company partnered with FDIC-insured WebBank to launch its credit card, Petal Card, to the general public last October. Petal has already received backing from a number of investors, including Paypal founder Peter Thiel's venture capital fund Valar Ventures. Its goal? To help people with no credit build credit using the fee-free Petal Card. What is Petal Card and how does it work? While Petal Card predominantly targets people who are new to credit, it hopes to help anyone who is "credit invisible" get a credit-building credit card that is straightforward and affordable. Most credit cards rely solely on your credit report to determine your creditworthiness, but for the Petal card, WebBank takes a more holistic — or, as cofounder Jason Gross told TechCrunch, "common sense" — approach to evaluating credit card applications. In some cases, this means looking at your "full digital financial record," (for example, checking and savings accounts), rather than just your credit and loans. Put plainly, Gross explains that in addition to your credit, Petal looks at your monthly income and monthly spending to determine whether or not you have the cash flow required to pay your bills on time. In addition to making it easier to gain approval, WebBank's unique underwriting process means it can offer higher credit limits and lower interest rates to Petal customers who might otherwise only have access to low limits and sky-high rates. Here are some of the key features of the Petal Card: 14.49% - 25.49% variable APR as of December 2019 $500 - $10,000 credit limit 1% cash back on eligible purchases, increasing to 1.5% cash back after 12 on-time payments Up to 10% cash back with select merchants — including Gap, Athleta, Banana Republic, Old Navy, Lowe's Home Improvement, and Casper — when you use a Petal card No late fee, no foreign transaction fee, and no annual fee 24/7 customer service The interest rate offered by Petal Card isn't low, per se, but it's low when compared to other credit cards that accept applicants without a credit history. According to CreditCards.com, the average interest rate on credit cards for people with bad credit is 25.33% as of May 2019. Petal Card really shines when it comes to fees. If you're using a credit card to build credit, (in other words, paying it off in full each month and only putting a few minor purchases on it), interest rate and credit limit aren't the most important features. What you really want to go after is a credit card that doesn't charge annual fees or foreign transaction fees and doesn't require an initial deposit — a rare to non-existent find for folks who have no credit. In early May, Petal announced that it would offer cardholders automatic 1% cash back on every purchase made with the card. After six months of on-time payments, those rewards will increase to 1.25% cash back, then to 1.5% cash back once a user has made 12 on-time payments. While you won't be able to visit this online-only company in a physical branch location, it does offer 24/7 customer service support online or over the phone. If you're worried about security, Petal Card can be trusted. Petal uses its technology to assess applicants but credit is issued by WebBank, a well-reviewed bank based in Salt Lake City, Utah that is FDIC-insured. An all-in-one budgeting app and credit card Petal wants to do more than just offer you credit — it wants to help you understand credit. Its app aims for transparency, explaining exactly what you owe and what your interest fees will look like if you don't pay your bill in full. Petal likes to use actual dollars rather than an interest rate percentage that most people don't fully understand. So, if you can't pay your bill in full, you can enter the monthly payment you'd prefer to make (as long as it's above the minimum) and the app will show you an estimate of what you'll end up spending on interest fees. You'll also have a budgeting app with Petal. The company asks you to connect your various bank accounts during the application process, so when you log into your Petal account, you'll see the balance for your Petal Card alongside your other bank and credit account balances. Having this information all in one place is meant to help you make informed and responsible financial decisions with your Petal Card. How to apply for Petal Card You can fill out WebBank's initial pre-qualification application for the Petal card online in about 15 minutes. The pre-qualification process results in a soft pull on your credit report, so it won't impact your credit at all. The pre-qualification application asks for basic personal information such as your birthday, phone number, and home address. You may also be asked to connect your checking, savings, and credit accounts so Petal can get a sense of your earnings and savings as well as your spending habits, which is meant to increase your chances of approval. Petal uses a third-party data provider and connects to your accounts securely, and it never stores your login information. After this, Petal will let you know if you're pre-approved for its Petal Card, which gives you a sense of your eligibility without dinging your credit. Keep in mind that pre-qualifying doesn't guarantee you'll be approved for the card. If you are pre-approved, you can finish the full application online and Petal will do a hard pull on your credit report, which might have a small, temporary effect on your credit. Apply for Petal here » Other ways to build credit from scratch While Petal Card might be the first of its kind, there are a handful of time-tested ways to build credit from zero or improve a bad credit score. For example, you can: Ask someone to co-sign a credit card application for you Ask someone to add you as an authorized user to their credit card Open a secured credit card Get a credit-builder loan The first two are ideal if you can find the right person to help you out because they cost nothing. I qualified for my first credit card with my local credit union when I was in college because my Dad was willing to co-sign my application, and this helped me build credit early on in life. By the time I was in my mid-20s, I already had excellent credit. Being added as authorized user on someone else's account — meaning you're given a credit card that's linked to their account, and all activity, whether theirs or yours, impacts your credit — can work out well, too, as long as you're wise about who you select. I helped my younger sister build her credit by adding her as an authorized user on one of my credit cards. After only a couple months of using the card, her score had increased significantly. However, if I had run up a large balance or missed a payment, her score probably would have decreased. If you don't have anyone else to help you out, opting for a secured credit card is your next best option. Just about anyone can qualify for these credit cards because they're guaranteed by an initial deposit and come with extremely low limits. It will cost you a little money up-front in the form of a deposit and possibly an annual fee, but the cost is worth it to build your credit. These cards do come with very high interest rates, so it's important to pay your bill in full each month. Credit-builder loans are my least favorite option, because I don't think you should ever have to pay interest fees in order to build credit. However, some people do appreciate the ease of this option, and people who have had credit card troubles in the past might be more comfortable with it. How Petal Card stacks up Credit cards will always be one of the more expensive ways to borrow money, and Petal Card is no different. That being said, if you do end up unable to pay your bill in full one month, you can rest easy knowing that you're not being charged predatory rates. I would avoid relying on Petal Card to borrow money and instead use it strictly to build credit. It's an excellent option in that regard, offering the accessibility of a secured credit card without the deposit requirements, fees, and high interest rate. Plus, while most secured credit cards come with limits as low as $250, Petal Card offers higher credit limits. This helps you decrease your debt-to-credit ratio, an important factor in your credit score, and also shows lenders that you can manage large lines of credit. Petal Card is designed for people who are new to credit, which is different from bad credit. You might have a harder time getting approved if you have serious negative marks on your credit report. According to Petal's website, it does look at your credit report, and "applicants who have a history of missed payments or bankruptcy, for example, may not qualify for Petal." If you do have a colorful credit history, a secured credit card might be a better bet. I'm also not convinced that it's ideal for people who already have good credit, although Petal's website does tout the card as a great second, third, or even fourth credit card due to its low fees. If you have a good credit score and don't plan on carrying a balance, it's better to opt for a rewards credit card so you can start earning off your spending. If you do tend to carry a balance on your credit card, or want a card to have on hand in case of emergency, good credit will help you qualify for low-interest credit cards that will be more affordable than Petal Card. Petal Card might not be the best credit card if you already have a robust credit history, but that's not really its purpose. Petal Card was created to help the "credit invisible" build credit with an affordable, transparent, user-friendly credit card, and in that regard, it's shaping up to be the best solution yet. Learn more about Petal or apply for a card here » This post was updated on December 23, 2019, to reflect Petal's new cash-back program with select merchants.Join the conversation about this story »