Fingerhut review: Is a Fingerhut® credit account a good way to build credit?

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In a Nutshell

Fingerhut is an online and catalog retailer that offers credit to qualifying individuals to make purchases using monthly payments. If you’ve had trouble getting approved for a traditional credit card, a Fingerhut® credit account could be an opportunity to build your credit. However, the monthly payments often result in higher prices.

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Fingerhut offers credit options to help you rebuild your credit scores, but it comes at a cost.

Fingerhut is an online shopping website that aims to make purchases affordable by offering credit accounts with low monthly payments.

A Fingerhut Credit Account issued by WebBank is designed to help you build credit. For example, Fingerhut often offers credit to those who have previously been turned down for credit cards. It also reports your payment history to the three major consumer credit bureaus — TransUnion, Equifax and Experian — which is important if you’re trying to build credit.

However, products on Fingerhut may cost more than they do on other sites, and you’ll probably pay a higher interest rate on balances from Fingerhut than you would if you used a different credit card. In other words, Fingerhut is a good option for those who want to build their credit and are unable to open credit lines elsewhere.

If that description fits you, an approval for a Fingerhut Credit Account issued by WebBank can give you the opportunity to make on-time payments and start building your credit scores.

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How does Fingerhut offer monthly payments on their items?

Although you can buy the items sold through Fingerhut outright, you can also pay through monthly payments. Either way, you have to qualify for one of the company’s two forms of credit, the Fingerhut Advantage Revolving Credit Account issued by WebBank or the Fingerhut FreshStart® Credit Account issued by WebBank.

Thankfully, both accounts are accessible for those with less-than-perfect credit.

Keep reading to learn more about the two credit accounts offered by Fingerhut.

WebBank/Fingerhut Advantage Credit Account

You can apply for the WebBank/Fingerhut Advantage Revolving Credit Account on the Fingerhut® website. There are no annual fees, membership fees or over-limit fees with this revolving credit account.

This credit account has a fixed 29.99% APR for purchases and a late fee and returned payment fee of up to $38. Note that this card can only be used for Fingerhut® purchases and at select Fingerhut® partners.

While the interest rate and late fees are steep, you won’t have to pay them if you pay your purchases off in full before the due date. Your due date is at least 24 days after the close of each billing cycle, and the company shouldn’t charge any interest on purchases if you pay off your entire balance by the due date each month.

If you do decide to carry a balance and make monthly payments, you’ll notice the minimum monthly payment structure is different than that of a credit card.

If your monthly payment is $1,400 or higher, your minimum payment is 5% of the account balance. If your balance is less than $1,400, your monthly payment isn’t a percentage of your account balance. Instead, it is based on your balance. For example, if you owe between $6.99 and $44.99, your minimum payment will be $6.99. The minimum payment can get as high as $69.99 per month if your balance is between $1,100 and $1,399.99.

It should be noted the monthly payment amounts shown on the product pages of Fingerhut’s website only apply if the item you purchase is the only item on your account. If you still owe money from previous purchases or end up making purchases in the future, your monthly payment can differ.

WebBank/Fingerhut FreshStart® Credit Account

If you aren’t approved for the WebBank/Fingerhut Advantage Revolving Credit Account, your application is automatically evaluated again to see if you qualify for the WebBank/Fingerhut FreshStart® Credit Account.

The WebBank/Fingerhut FreshStart® Credit Account is an installment loan that allows you to prove to Fingerhut that you can make monthly payments on a purchase of $50 or more. If you complete payment according to the terms of the agreement, you may become eligible for a WebBank/Fingerhut Advantage Revolving Credit Account.

Under the WebBank/Fingerhut FreshStart® Credit Account, you’ll make a down payment of $30 followed by six or eight monthly payments at a fixed 29.99% APR. If you make a late payment, you’ll be charged $4.90 for balances between $15 and $50 or $14.90 if your balance is over $50. The returned payment fee is $25.

It’s important to note that the monthly payment amounts for products shown on Fingerhut do not apply to the WebBank/Fingerhut FreshStart® Credit Account. Your minimum payment for the WebBank/Fingerhut FreshStart® Credit Account is calculated at the time of your purchase and will be disclosed to you with your WebBank/Fingerhut FreshStart® Credit Account installment loan agreement.

If you pay for the item you purchase in full at the same time as your down payment, the WebBank/Fingerhut FreshStart® Credit Account will be cancelled and you won’t be considered for a WebBank/Fingerhut Advantage Revolving Credit Account.

Pros and cons of using a service like Fingerhut

Using a service like Fingerhut can add to the cost of products you buy.

First, you may be able to find the same products sold at Fingerhut priced cheaper elsewhere. In addition, you’ll also have to pay a fairly high variable APR on any purchases you don’t pay off in full.

“I would not recommend Fingerhut as a means of rebuilding credit because it is encouraging someone to spend money for things they cannot pay cash for and charging a very high interest rate in the process,” says Anthony Kirlew, personal finance expert at Fiscally Sound.

On the other hand, Fingerhut can help people improve their credit scores by reporting credit activity to the three major credit bureaus. Fingerhut may approve people for a credit line when some other lenders would deny them.

As with other types of credit, if you get Fingerhut® credit, use the credit responsibly and always make your payments on time to avoid high interest charges. If you do this, you may be rewarded with higher credit scores and could potentially move on to different types of credit.

Bottom line

Fingerhut has the potential to help people with bad credit gain access to either a WebBank/Fingerhut Advantage Revolving Credit Account or a WebBank/Fingerhut FreshStart® Credit Account. When used responsibly, your credit health could increase. If you’re willing to pay a premium for the ease of use, it may be the right option for you.

Kirlew is skeptical of Fingerhut because in his experience “people who suffer credit challenges often repeat their mistakes.”

If you’re looking to improve your credit without paying a premium for products as well as interest, you may want to look into opening a no- or low-fee secured credit card, an unsecured credit card for people with poor credit, or a student credit card. Then using the account responsibly is key if you want to improve your credit.

Once you open one of these types of cards, you can make a purchase and pay the statement balance in full and on time to avoid any interest charges. If you stick to it, this can be a great way to start building your credit without paying interest on your purchases.