Finance
Empower Finance Buys Petal. What’s That Mean for Petal Credit Card Users?
Key takeaways
- Empower Finance, best known as a cash-advance app, is buying credit card issuer Petal.
- Petal touted its credit cards as a solution for those with less-than-stellar credit but came under fire last year when it downgraded some customers to annual-fee cards.
- Cardholders can wait and see if an influx of money improves benefits or apply for a new card before changes come.
Empower Finance is buying Petal, the credit card issuer that originally made a splash with the promise of helping customers build their credit inexpensively but ended up downgrading some of those same customers to cards charging numerous fees.
When it launched in 2016, Petal credit card company touted itself as an affordable way to access credit for anyone with a less-than-stellar credit history. Its approval process used alternative data like banking information instead of just credit scores and credit history.
And unlike some credit-builder cards, Petal doesn’t charge a security deposit. Plus, you could earn 1% to 10% in cash back — depending on the card you were approved for — a rarity for a credit-builder card with no annual fee.
But the company stumbled amid financial woes with users reporting issues that included some customers being downgraded to a version of the card that charged an annual fee.
If you’re a current Petal cardholder or are interested in using one of this company’s cards to boost your credit, here’s what the acquisition could mean for you.
Who is Empower Finance?
Empower Finance is best known as a cash-advance app (it is not affiliated with Empower, which offers investment and retirement planning services). A cash advance is basically a short-term loan you can access without having to apply for a loan through a bank or online lender. Depending on where you borrow from — like a predatory lender — cash advances can charge sky-high interest rates.
Empower doesn’t charge interest or late fees on its cash advances, but you must subscribe to its app, which costs $8 per month. Instead of your credit history, Empower says it uses your income and spending habits to determine how much you can borrow, up to $250. The amount borrowed is deducted from your bank account on your scheduled repayment date.
Empower Finance also offers other financial products and money management tools on its app, including a credit product called Thrive, as well as credit monitoring and savings and budgeting tools.
Empower plans to complete its acquisition of Petal by the end of June and is expected to integrate both companies’ offerings into one product experience, although it’s unclear how that might play out.
What does this mean for Petal cardholders?
Petal customers could potentially benefit by getting access to all of the Empower Finance products and money management tools. But it could also mean they get charged Empower’s $8-per-month subscription fee.
And while Empower’s cash advances offer potential value, if borrowers need more time to repay, they might be tempted to use the Thrive credit service instead, said Jason Steele, credit card expert and CNET expert review board member.
“Empower advertises cash advances with no interest or fees, but if you choose your repayment date instead of the default or select a split payment option, then you’ll incur interest at an annual percentage rate of 35.99%,” he said. “This isn’t as predatory as some payday loans, but it’s higher than many credit cards.”
Despite users’ dissatisfaction with Petal’s downgrading practices, the credit card company is still well-known for its cash flow underwriting technology, offering an alternative for people who either have no credit or have poor credit reports and scores, according to credit expert John Ulzheimer, formerly of FICO and Equifax.
Petal’s technology appears to align with Empower’s underwriting business that assesses consumers using nontraditional data rather than credit histories.
“While it’s unknown what Empower will maintain from their Petal acquisition, it seems to make sense to fold in their cash flow tech to existing underwriting practices,” Ulzheimer said.
Credit cards typically charge an upfront fee for cash advances, and they come with a higher interest rate — typically 24.99% to 29.99% or higher — than a card’s standard APR.
What happened to Petal last year?
The acquisition was announced earlier this month, nearly a year after the Petal card brand came under fire for downgrading customers to an annual-fee card. Some customers who had either the Petal® 1 “No Annual Fee” Visa® Credit Card* or Petal® 2 “Cash Back, No Fees” Visa® Credit Card, both of which have no annual fee, reported that the company had downgraded them to the new Petal 1 Rise* card, which charges a $59 annual fee and has a higher variable APR than the other two cards.
The Petal 1 Rise also included a 3% cash-like transaction fee with a $10 minimum (cash-like transactions include money orders, person-to-person cash transfers like Venmo or CashApp, lottery tickets and gift card purchases), a late fee of up to $40 and a returned payment fee of up to $29.
For a company that promoted itself as an inexpensive way to build credit, the new terms were much different than the previous Petal cards. Users who signed up for one card were ultimately forced into an ultimatum: They could either accept the new terms and pay the annual fee, which could be difficult on a limited budget, or cancel their card, which could damage their credit score.
What’s more confusing is that both the Petal 1 and Petal 2 cards are still available with no annual fee. And while both cards are still great credit building options for users, CNET no longer recommends them since there’s no guarantee you won’t be downgraded to the lower-tier Petal Rise.
What happens next?
For now, Petal cardholders will likely not see much change immediately, but the new influx of money from an acquisition could change users’ experience, according to Steele.
“Petal has been struggling as a company and its acquisition could offer it new resources, or it could result in a significant change to its business model,” Steele said.
In the meantime, current Petal cardholders can wait it out to see if there are positive improvements or find a new credit card altogether.
If you decide to close your Petal account and apply for a card from a different issuer, consider keeping your Petal account open during the application process so your current credit line can help demonstrate your creditworthiness.
Card alternatives for Petal users
If you’re looking to trade in your Petal card because of the downgrade or acquisition and your credit score is still low, you may want to consider applying for a secured credit card, which typically requires a security deposit.
“I strongly recommend those with fair or poor credit consider a secured card with no annual fee, rather than an unsecured card with numerous fees,” Steele said.
Specifically, Steele recommends cardholders with fair or poor credit get a secured credit card like the Capital One Platinum Secured Credit Card* or the Discover it® Secured Credit Card*. The Capital One Platinum Secured Credit Card lets users begin building credit with a security deposit as low as $49 and no annual fee. The Discover it® Secured Credit Card has a credit limit range of $200 to $2,500 that is directly proportional to the deposit amount. It doesn’t charge an annual fee, and it lets users earn cash-back rewards.
If you’re a Petal cardholder who’s been using your card responsibly for at least a year, you may qualify for an unsecured credit card with no annual fee. If you’re going this route, Steele recommends applying for a simple card from your bank or credit union.
*All information about the Petal 1 “No Annual Fee” Visa Credit Card, the Petal 1 Rise, the Capital One Platinum Secured Credit Card and the Discover it Secured Credit Card has been collected independently by CNET and has not been reviewed by the issuer.
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The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.
Finance
German finance minister wants to scrap spousal tax splitting
Last weekend, several thousand people took to the streets in Munich to demonstrate against abortion and assisted suicide. One speaker made an extremely dramatic plea against what he called the “culture of death” that has allegedly taken hold in Germany. One sign of this, the speaker argued, was that the government is planning to abolish a regulation known as “spousal tax splitting.”
Is tax law really relevant to deep philosophical debates on the sanctity of life? It is even a matter of life and death at all? Surely we needn’t go that far? In any case, the intense political uproar surrounding the new debate on whether to abolish spousal tax splitting is notable, even by today’s standards of populist outrage.
An advantage for couples with widely divergent incomes
The row was sparked by Germany’s vice chancellor and finance minister, Lars Klingbeil, of the center-left Social Democratic Party (SPD), who said he wanted to abolish and replace the joint taxation of spouses’ income, a system that has been in place since 1958.
How exactly does spousal tax splitting work? In Germany, married couples (and since 2013, couples in civil partnerships), can choose to have their income assessed jointly by the tax authorities.
It means that the taxable income for both spouses together is halved – as if both partners had each earned an equal half of the income. Their tax liability is then determined by simply doubling the income tax due on one half.
As people who earn more pay higher taxes in Germany, this system benefits couples where one partner (and often this is still the man) earns significantly more than the other (in practice often the woman).
Costs of up to €25 billion per year
If for example one partner earns €60,000 ($70,512) a year and the other partner earns nothing, the couple will be taxed as if they earned €30,000 each. In this example, the couple would save nearly €5,800 in taxes per year compared to the amount they would owe if both partners filed their taxes separately. According to the Finance Ministry, spousal tax splitting costs the government a total of up to €25 billion annually.
Some critics have long viewed splitting as a tool to keep women out of the labor market, because the more a woman earns, the larger her tax burden becomes. Klingbeil seems to agree, arguing on ARD television in late March that the system was “out of step with the times.” The spousal splitting system reflects “a view of women and families that is completely at odds with my own,” he said.
Chancellor Merz said to be in favor of splitting
On Monday of this week, Klingbeil got some surprising support on this from Johannes Winkel, head of the youth wing of the conservative Christian Democratic Union (CDU).
“Given the demographic reality, the government should create incentives to ensure that both partners in a relationship are employed,” Winkel told the Funke Media Group. “In the future, tax relief should primarily be granted to married couples when they are facing hardships related to raising children.”
But the chancellor is a vocal skeptic of the proposal. “I am not convinced by the claim that joint filing for married couples discourages women from working,” Friedrich Merz said at a conference organized by the Frankfurter Allgemeine Zeitung newspaper. “Marriage is a relationship based on shared income and mutual support. And in a marriage, income must be treated as a joint income for tax purposes, not separately.”
Klingbeil’s alternative plan
At around 74%, the labor force participation rate for women in Germany is one of the highest in Europe, but half of them work part-time.
Klingbeil’s idea is to replace the existing system with a more flexible approach: Both partners would be able to distribute tax-free income among themselves in such a way that it minimizes their tax liability. This would allow the couple to continue enjoying a tax advantage, albeit not to the same extent as before. And whether one partner earns more than the other would become less important.
However, it remains to be seen whether Klingbeil will be able to push through his proposal. Aside from Germany, similar regulations offering tax benefits to couples exist in Poland, Luxembourg, Portugal and France.
This article was originally written in German.
Finance
Departing inspector general targets Council Office of Financial Analysis
The $537,000-a-year office created in 2014 to advise the City Council on financial issues and avoid a repeat of the parking meter fiasco has failed to deliver on that mission, the city’s chief watchdog said Tuesday.
Days before concluding her four-year term, Inspector General Deborah Witzburg said a shortage of both adequate staff and financial information closely held by the mayor’s office prevents the Council’s Office of Financial Analysis from helping the Council be the the “co-equal branch of government” it aspires to be.
In a budget rebellion not seen since “Council Wars” in the 1980s, a majority of alderpersons led by conservative and moderate Democrats rejected Mayor Brandon Johnson’s corporate head tax and approved an alternative budget, including several revenue-generating items the mayor’s office adamantly opposed.
But Witzburg said the renegades would have been in an even better position to challenge Johnson if only their financial analysis office had been “equipped and positioned to do what it’s supposed to do” — provide the Council with “objective, independent financial analysis.”
“We are entering new territory where the City Council is asserting new, independent authority over the budget process. It can’t do that in a meaningful way without its own access to financial analysis,” Witzburg told the Chicago Sun-Times.
Chicago Inspector General Deborah Witzburg’s latest report focuses on the Chicago City Council’s Office of Financial Analysis.
Jim Vondruska/Jim Vondruska/For the Sun-Times
But the Council’s financial analysis office, she added, “has never been equipped or positioned to do what it needs to do. It needs better and more independent access to data, and it needs enough staff to do its job. It has a small number of employees and comparatively limited access to data.”
The inspector general’s farewell audit examined the period from 2015 through 2023. During that time, the financial analysis office budget authorized “either three or four” full-time employees. It now has a staff of five .
Witzburg is recommending a staffing analysis to identify how many people the financial office really needs — and also recommending that the office “get data directly” from other city departments, “ rather than having it go through the mayor’s office.”
The audit further recommends that the office develop “better procedures to meet their reporting requirements” in a timely manner. As it stands now, reports are delivered “sometimes late, sometimes not at all,” the inspector general said.
“We find that those reports have been both not timely and not complete in terms of what they are required to report on and that those reports therefore have provided limited assistance to the City Council in its responsibility to make decisions about the city’s budget,” she said.
The Council Office of Financial Analysis responded to the audit by saying it hopes to add at least three full-time staffers in the short term and has made “some progress” over the last three years in improving their access to data, but not enough.
The office was created in 2014 to provide Council members with expert advice on fiscal issues.
For nearly two years the reform was stuck in the mud over whether former 46th Ward Ald. Helen Shiller had the independence and policy expertise to lead the office.
Shiller ultimately withdrew her name, but the office was a bust nevertheless. In an attempt to breathe new life into it, sponsors pushed through a series of changes.
Instead of allowing the Budget chair alone to request a financial analysis on a proposal impacting the city budget, any alderperson was allowed to make that request.
The office was further required to produce activity reports quarterly, not just annually.
Now former-Budget Chair Pat Dowell (3rd) then chose Kenneth Williams Sr., a former analyst for the office, as director and gave him the “autonomy” the ordinance demanded.
Two years ago, a bizarre standoff developed in the office.
Budget Committee Chair Jason Ervin (28th) was empowered to dump Williams after Williams refused to leave to make way for a director of Ervin’s own choosing.
The standoff began when Williams said he was summoned to Ervin’s office and told the newly appointed Budget chair was “going in a different direction, and I’m putting you on administrative leave” with pay.
“He took all my credentials and access away. I would love to come to work. I wasn’t allowed to come to work,” Williams said then.
Williams collected a paycheck for doing nothing while serving out the final days remainder of a four-year term.
Ervin’s resolution stated the director “may be removed at any time with or without cause by a two-thirds” vote or 34 alderpersons. He chose Janice Oda-Gray, who remains chief administrator.
Finance
Reilly Barnes Returns to Little League® as Purchasing/Finance Assistant
Little League® International has announced that Reilly Barnes accepted a new role as Purchasing/Finance Assistant, effective April 6, 2026. Barnes transitions from a temporary Purchasing Assistant to this full-time position to assist in the year-round demands of purchasing for the organization, as well as the region and Little League Baseball and Softball World Series tournaments.
“We are thrilled to welcome back Reilly to our team as a full-time Purchasing/Finance Assistant. Reilly’s prior experience, time management, and attention to detail make him an invaluable asset to the purchasing team,” said Nancy Grove, Little League Materials Management Director. “We look forward to the positive contributions he will have on our organization.”
In this role, Barnes will be responsible for processing purchase requisitions, coordinating souvenir products, and tracking order fulfillment. He will also assist with evaluating suppliers, reviewing product quality, and negotiating contracts for effective operations.
After most recently working as a Logistician Analyst at Precision Air in Charleston, South Carolina, Barnes, a Williamsport native, returns after honing his skills in the fast-paced environment. Prior to his time at Precision Air, Barnes served as a Procurement Specialist at The Medical University of South Carolina, where his expertise and knowledge were instrumental in supporting both education and healthcare needs.
“I am thrilled to return to Little League in this full-time role,” said Barnes. “Coming back to my hometown and having the opportunity to work for an organization that has played such a special part of my upbringing means a lot. I can’t wait begin this new opportunity.”
Barnes graduated from the University of Pittsburgh in 2022 with a B.A. in Supply Chain Management, Finance, and Business Analytics.
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