Overview

Petal offers a credit card service aimed at helping individuals, particularly those with limited or no credit history, to build their credit scores. Instead of relying solely on traditional credit scores, Petal evaluates applicants based on their bank data, spending, and saving habits, allowing them to extend credit to those who might be overlooked by conventional methods. The company provides three types of credit cards, each with no annual fees and cash back rewards ranging from 2% to 10% at select merchants. Additionally, Petal has a program called "Leap" that rewards cardholders with a credit line increase after six months of on-time payments. Petal generates revenue through interest on carried balances and transaction fees from merchants. Their mobile app enhances the user experience by allowing customers to track their credit scores, view transactions in real time, and make payments easily. Petal's goal is to promote financial inclusion and responsible credit use.

Simplify's Take

What believers are saying

• Petal secured a $200 million debt facility to expand its credit card program.
• Petal's cash flow underwriting aligns with the trend of financial inclusion.
• Petal's mobile-first approach caters to the growing demand for digital services.

What critics are saying

• Petal faces competition from companies like TomoCredit using similar underwriting methods.
• The acquisition by Empower Finance may disrupt Petal's business model.
• Petal's reliance on debt financing could increase financial vulnerability.

What makes Petal unique

• Petal uses cash flow underwriting instead of traditional credit scores.
• Petal offers a user-friendly mobile app for real-time credit tracking.
• Petal provides credit cards with no annual fees and cash back rewards.

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