Deserve EDU vs Petal 1 & 2

Two Cards for people with no or very little credit history

Both the Deserve EDU and Petal credit card target certain groups of people with no or very little credit history and differentiate themselves by making it easier for these groups to get their first credit card. Deserve EDU is a student credit card but they make it easy for international students to get this card without first having to get their social security number. Petal, on the other hand, looks at your bank statements and cash flow rather than just your credit score in their evaluation process. How do these two cards stack up? Let's find out.

The Basics

Deserve EDU Basics

The Deserve EDU is card that is target at college students looking for their first credit card. The standout feature of this card is that international students can apply for this card without a social security number (SSN). You do however need proof of US bank account balance, passport ID, student Visa and I-20 form. US students with no credit history can also apply for this card though they would need their SSN to apply. Deserve EDU also have the following features that are very "student friendly".

• No Annual Fee and no Foreign Transaction Fee - The Deserve EDU is one of the few student credit cards with no foreign transaction fees. This makes it ideal for international students if they return home during school breaks or even US student cardholders when they are travelling or studying abroad.


• 1% Cash Back on all purchases


• Amazon Prime Student Membership for 1 year - Deserve EDU will give you a statement credit of $59 if you decide to get the Amazon Student Prime Membership annual plan (which is $59) after the free trial.


• $600 Cell Phone Loss and Theft Coverage - Deserve EDU is also one of the few credit issuers that offer this feature.

Petal 1 Basics

Petal has 2 credit cards, the Petal 1 and Petal 2. Both cards target people with little or no credit history. Petal requires applicants to first go through a pre-approval process which involves a soft pull on your credit report. If you are pre-approved, Petal will require you to link your bank account because they look at your cash flow, debt payment to income ratio rather than your credit report for their final evaluation as to whether to approve you and if so how much credit limit to give you. Below are the key features of Petal.

• No Fees - Petal does not charge any fees. That means there is no annual fee, no foreign transaction fee, no cash advance fees and no late fees.


• 2% to 10% Cash Back with Partner Merchants - Petal makes it easy to find these partners through their app using geo-location.


• $500 to $5,000 Credit Limit - This is the credit limit range for Petal 1.


• Credit Limit Increase Through LEAP Program - Petal cards will give you a credit limit increase if you use the LEAP program in their app, which requires you to meet 3 criterias. They are 1). You have to make 6 monthly payments in a row of either the minimum payment or 15% of your balance (whichever is greater), 2) choose a credit score "goal" and do not let your score fall below 50 points of your goal in you have Petal 1 or 25 points if you have Petal 2.

Petal 2 Basics

The Petal 2 is a step up from Petal and is better than Petal 1 in the following ways:

• Earn 1.5% Cash Back on all purchases - Petal 2 allows you to earn 1% cash back on all purchases and an additional 0.5% when you pay on time. That makes it a total of 1.5%.


• Credit Limit between $500 and $10,000 - Petal 2 has a higher credit limit ceiling ($10,000 vs $5,000) than Petal 1

Similarities

• No Annual Fee - Both Deserve EDU and the Petal 1 & 2 cards all do not charge any annual fee.


• No Foreign Transaction Fees - Both Deserve and Petal do not charge any foreign transaction fee


• Cash Back Program - Both Deserve and Petal 2 have flat rate cash back rewards but the Petal 1 only gives you cash back with select partner merchants.

Differences

• Deserve EDU 1% Cash Back vs Petal 2 1.5% Cash Back - Though both the Deserve EDU and Petal 2 allow you to earn cash back at a flat rate, the Petal 2 has a higher rate at 1.5% (1% for purchases, 0.5% for paying on time) compared to the 1% cash back that you earn on Deserve.


• Merchant Partners - Though Deserve has a 1% cash back program, they do not have merchant partners that will allow you to earn cash back outside of the normal purchases. In contrast, both the Petal 1 and Petal 2 have merchant partners that allow you to earn 2% - 10% when you make purchases with your Petal cards.


• Cell Phone Protection - Deserve EDU offers cell phone protection insurance for up to $600. Having said that, most US students would have their cell phone under their parents plan and would not be benefit from this feature as it only applies to primary cell phone holders. International students who would be the primary cell phone owners should they have their own plans would benefit from this. Both Petal cards do not have this feature.


• Method of Approval - Deserve EDU is targeting students and one of the unique features is that International Students can apply without any SSN (though they need other documents). Regular students go through the usual pre-approval (soft pull with no impact on credit limits) and approval process (which involves a hard inquiry).
  
  The Petal 1 & 2 does not do any hard inquiry when you apply. Instead you have to go through a pre-approval process which will have no impact on your credit score. If you are pre-approved, then you will be asked to link your bank account so Petal can check your activities to decide whether to approve you or not and what is your credit limit.

Ways which Deserve EDU is better

Deserve EDU is targeted at students and it is especially friendly to international students coming to the US and have not gotten a social security number. They also also cell phone protection insurance and a free one-year membership for Amazon Student Prime, which Petal does not. Hence, the Deserve EDU is better in these two aspects compared to both Petal credit cards.

Ways which Petal is better

Petal is better than Deserve the following ways. Firstly, as an issuer that focuses on those with no credit (especially immigrants), Petal does not do any credit checks but instead checks your bank account and make approval and credit limit decisions based on that. Secondly, they have a higher cash back program (1.5% vs 1%) than Deserve EDU (I am referring to the Petal 2 here as the Petal 1 does not have a cash back program).

Which is better?

Both the Deserve EDU and Petal are relatively new credit cards with offer no annual fees and no foreign transaction fees. In Petals' case, they charge no other fees at all. Both also offer snazzy apps. As far as features go, the Petal 2 has the highest cash back rewards (1.5% on all purchases) while the Deserve EDU has a 1% cash back earnings on all purchases. The Deserve EDU has a cell phone protection insurance feature and a free one year membership to Amazon Student Prime that both Petal cards do not.

However, it is a tough call as to which is the better card simply because they both target different consumers. Deserve EDU is for students and in particular, they market themselves heavily to international students because they do not require SSN for international students when they apply (though other documents like passport are needed). And they have features that reflect that. For ex ample, they will give cardholders a statement credit for a one year subscription to Amazon Student Prime. They also offer cell phone theft and loss insurance which will be helpful for international students who are the primary cell phone owners.

The Petal credit cards on the other hand, is particularly suited to those with no credit or with very little credit history but have a steady income and good positive cash flow. Petal will look at the cashflow of your bank account and determine your credit limits and whether or not to approve you based on that. They are ideal for those with very little credit history.

At the end of the day, it is difficult to say which are is better. Both have no annual and foreign transaction fees, have some form of cash back rewards and should appeal to folks that they are targeting.