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Fingerhut Credit Review: Easier Credit Access, but With Costs

The inflated prices, stiff APR and shipping expenses associated with the retailer may not make it the best choice.
Nov. 1, 2018
Credit Cards, Credit Cards for Bad Credit
Fingerhut Credit Review: Easier Credit Access, but With Costs
NerdWallet adheres to strict standards of editorial integrity to help you make decisions with confidence. Some of the products we feature are from partners. Here’s how we make money.
We adhere to strict standards of editorial integrity. Some of the products we feature are from our partners. Here’s how we make money.

If you’re looking for a way to buy something and pay it off over time, but your credit isn’t great, you may have considered shopping with Fingerhut.

Fingerhut is a catalog and online merchant offering thousands of products ranging from electronics to bedding to auto parts, all available to buy and finance through the company’s own credit line. The retailer caters to those with less-than-stellar or nonexistent credit history, so applicants might have better odds of approval with Fingerhut than they would with some major issuers.

But unlike other credit cards for poor credit, you can only use Fingerhut credit to purchase items from the company’s offerings or authorized partners. You’ll also encounter steep prices and interest rates, so make sure you understand what you’re getting with a Fingerhut credit line.

Shopping with Fingerhut

If you’ve been approved for a Fingerhut credit account, you can log in to the company website to browse their goods or request that a paper catalog be mailed to you. Orders can be placed online, over the phone or by mail.

It’s important to know that Fingerhut charges higher prices for its merchandise than other retailers, so although it may be easier to get a credit account at Fingerhut than elsewhere, you’ll be paying a premium for the privilege to shop the catalog.

Although it may be easier to get a credit account at Fingerhut than elsewhere, you’ll be paying a premium for the privilege to shop the catalog.

NerdWallet analyzed the prices in several different categories — from arts and crafts and blenders to kids’ shoes, TVs and tool sets — and found that without exception, Fingerhut’s prices were significantly steeper than the average retail price at Amazon or Walmart.com.

Not only will you be paying more for your merch than if you had shopped with another retailer, but the total price shown on Fingerhut’s site doesn’t include the 29.99% annual percentage rate for carrying a balance.

As an example, Fingerhut offers a Samsung 43″ LED Smart TV for $579.99. In larger, bolder type, it notes that payments are $46.99 per month. Without any finance charges, it would take you about a year to pay off the balance.

But factor in the 29.99% APR and, according to Fingerhut’s existing balance payment chart, an item that costs between $550 and $649.99 at payments of $46.99 will take 18 months to pay off, for a total amount paid of $807.49.

And then there’s shipping: Fingerhut charges higher-than-average fees for getting your purchase to you. According to the Fingerhut shipping and handling chart, that Samsung TV that you’re already paying a premium price for will also cost you an additional $29.99 in shipping, bringing your grand total to $837.48.

Amazon and Walmart both offer that same TV for less than $400, and both offer free shipping on an item at that price.

» MORE: Can’t get a credit card? Try these alternative options

How Fingerhut credit works

There are two types of Fingerhut credit accounts:

  • WebBank/Fingerhut Advantage Credit Account.
  • Fingerhut FreshStart® Installment Loan issued by WebBank.

When you submit an application for credit on the Fingerhut website, you’re applying for two accounts. You won’t know which one you’re approved for until after you apply.

When you submit an application for credit on the Fingerhut website, you’re actually applying for both accounts. If you aren’t approved for the WebBank/Fingerhut Advantage Credit Account, you’ll automatically be considered for a Fingerhut FreshStart® Credit Account issued by WebBank. You won’t know which one you’re approved for until after you apply.

Both lines of credit are issued by WebBank and are designed to let you buy Fingerhut’s wares and pay for them on a payment plan with an APR of 29.99%. That’s where the similarities end.

The WebBank/Fingerhut Advantage Credit Account

The WebBank/Fingerhut Advantage Credit Account is a closed-loop store credit card, meaning it’s an unsecured account that you can only use to shop with Fingerhut or authorized partners. More on that later.

Key features include:

  • No annual fee.
  • The interest rate on purchases is 29.99%.
  • Late or returned payments will be charged a $38 fee.
  • You may or may not be required to make a down payment on your first purchase. You won’t know until you apply.

If you aren’t approved for this account, you’ll automatically be considered for a Fingerhut FreshStart® Credit Account issued by WebBank, which has different terms and structure.

Fingerhut FreshStart® Installment Loan issued by WebBank

If you’re approved instead for the Fingerhut FreshStart® Installment Loan, it’s set up in three steps:

  • Make a one-time purchase of at least $50.
  • Then, make a minimum of a $30 down payment and your order is shipped after payment is received. Credit cards are not accepted for down payments, so you’ll have to use another option, including a debit card, an ACH payment, a paper check or a money order.
  • Pay off the balance in monthly payments split into either six or eight payments.

If you pay off your purchase in that time frame or earlier (without any late payments), you can upgrade to a revolving Fingerhut Advantage Credit Account. Note that if you decide to pay your entire balance owed when you make your down payment, you won’t qualify for the loan or for potential upgrading.

The terms and conditions give examples of the fees involved:

FreshStart account fees
Cash price/sale price$50$100
Required down payment$30$30
Finance charge$1.79$6.25
Terms of repayment6 monthly payments of $3.636 monthly payments of $12.71

Positive features to keep in mind

Besides offering a high likelihood of getting approved, a WebBank Fingerhut Advantage Credit Account does have a handful of other beneficial traits:

  • No annual fee.
  • Fingerhut credit can be used at select partnerships with other retailers, like florists and insurance companies. For example, at the time of this writing, you could use your Fingerhut account to make a purchase at Teleflora.com at the same prices available to the general public.
  • According to the Fingerhut website, on-time payments will be reported to all three major credit bureaus, which means good payment behavior can help your credit scores. If you consistently pay your bill in full and on time, you could eventually qualify for a credit card that you can use anywhere, not just at Fingerhut.
  • There’s no penalty on the WebBank Fingerhut Advantage Credit Account for paying off your balance ahead of schedule.

Alternatives to a Fingerhut credit account

Although it may seem tempting to apply for a credit card from a company that suggests right on its homepage that you can “get the credit you deserve,” there are other options that likely make better financial sense, even if your credit isn’t great.

If you have the $200 minimum opening deposit, the OpenSky® Secured Visa® Credit Card may grant you a secured credit card without a credit check or even a bank account. The card also reports to all three credit bureaus, so if you practice good payment behavior, you can elevate your credit profile. Best of all, you can use the OpenSky® Secured Visa® Credit Card to shop at any retailer you like, giving you freedom to compare prices. It does have an annual fee of $35.

If the idea of an annual fee is unpalatable to you, then consider the Discover it® Secured. It has an annual fee of $0, and Discover will also consider letting you graduate to an unsecured card starting at eight months. It’s also one of the only secured cards that earns rewards. You’ll get 2% cash back at gas stations and restaurants on up to $1,000 in spending per quarter, and an unlimited 1% back on all other purchases. Plus, you’ll be eligible for a bonus that Discover phrases this way: Discover will match ALL the cash back you've earned at the end of your first year, automatically. There's no signing up. And no limit to how much is matched.

If you have a credit file but it’s thin, the $0-annual-fee Deserve® Pro Mastercard is a worthy option. There’s no security deposit required, and even if you don’t have established credit, the issuer may use its own underwriting process to determine creditworthiness, depending on income and employment verification requirements. The card also offers cash-back rewards: 3% back per dollar spent on travel and entertainment and 2% back at restaurants on up to $500 per billing cycle combined (1% cash back on all other purchases).