Fingerhut Credit Account Review: Option for Financing Retail Purchases.
Fingerhut Credit Account Review:You may have considered shopping with Fingerhut if you’re looking for a way to buy something and pay it off over time but your credit isn’t nice.
Fingerhut is a store and online retailer selling thousands of products ranging from electronics to bedding to auto parts, all available through the company’s own credit line for buying and financing. The retailer supplies those with less-than-stellable or non-existent credit history, so applicants may have better odds of approval with Fingerhut than some major issuers would have.
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.
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.
People have 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.
For 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.
However, 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.
Amazon and Walmart both offer that same TV for less than $400, and both offer free shipping on an item at that price.
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 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
Required down payment
Terms of repayment
6 monthly payments of $3.63
6 monthly payments of $12.71
Who is This Credit Card Best For?
If your credit history is brief, but your Fingerhut shopping need is pressing, you may be a good match for the Fingerhut Credit Account. You won’t need a stellar credit score to qualify for this card, so it’s an option if you want to build your credit history, too. But only if you’re a Fingerhut regular, because you can’t use this card anywhere else. If that’s you, this card can help you stock up on Fingerhut merchandise, and get you on your way to a better credit score—and to better credit cards.
Easy qualification: Because the Fingerhut Credit Card is a store credit card, it may be easier to qualify for than a traditional credit card.
Can help build credit: The Fingerhut Credit Card reports your payments to all three credit bureaus, which can help you build your credit score over time.
No rewards or discounts: While many store credit cards offer the ability to earn coupons or discounts on future purchases with every dollar you spend, this credit card doesn’t offer any such program.
Limited utility as a credit card: Another downside of this card is the fact that it’s only a store credit card—it’s not a traditional credit card co-branded with Visa or Mastercard. This means you can only use your Fingerhut Credit Card for Fingerhut purchases.
Other 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.
Fingerhut’s credit application doesn’t provide information about minimum credit score requirements. But since this is a credit builder account, you can get approved with a low credit score or no credit history. Depending on your situation, you’ll either receive a Fingerhut credit account or a Fingerhut FreshStart installment loan.
You might not qualify for a Fingerhut credit account (at this time) if negative items have appeared on your credit report within the past 12 months.
2. What is the minimum credit limit/loan amount?
Fingerhut also doesn’t provide information about minimum credit/loan limits for its accounts.
However, users have reported receiving an initial credit account limit of $200. Their credit limits gradually increased with demonstrated creditworthiness.
If you don’t qualify for a Fingerhut credit account, but you’re eligible for the company’s installment loan, you can use this loan on purchases of $50 or more.
3. What are the loan terms?
Loan terms with Fingerhut vary depending on whether you have the retailer’s credit account or installment loan. The credit account is a revolving credit line, so there isn’t a loan term.
You can borrow up to the amount of your credit limit. You’ll get a monthly bill with a minimum monthly payment amount, which is based on your interest rate and your credit balance.
4. How can Fingerhut improve my credit?
Getting a Fingerhut credit account can build or rebuild your credit history because the merchant reports credit activity to all three major credit bureaus. Each timely payment results in positive activity being reported to the bureaus.
The more positive activity on your credit report, the better your credit score. So it’s important to make your payments on time every month. If you have a credit account, it’s smart to also pay off your balance in full every month. This way, you avoid debt and high interest charges. Plus, too much revolving debt can lower your credit score. As a general rule of thumb, your credit balance should never exceed 30% of your credit limit.
The Fingerhut Credit Account, issued by WebBank, is a barebones store credit card. It doesn’t offer a sign-up bonus (not even a discount on a first purchase). It won’t help you save money on future Fingerhut purchases. There’s no cash back or points or coupons to earn and redeem. It’s a basic store credit card consumers can use to finance their Fingerhut purchases and along the way build (or rebuild) their credit histories.
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