Fingerhut Credit Review: Easier Credit Access, but With Costs

If you have less-than-ideal credit but still need to buy something, you might be considering shopping at 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 bad or no credit, 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 exorbitant interest rates, so make sure you understand what you're getting with a Fingerhut credit line.

Fingerhut credit: An overview

There are two types of Fingerhut credit accounts:

• WebBank/Fingerhut Fetti credit account.

• WebBank/Fingerhut FreshStart installment loan.

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 Fetti credit account, you'll automatically be considered for a WebBank/Fingerhut FreshStart installment loan. 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. As of this writing, the interest rate for both accounts was an astronomical 35.99%.

» LEARN: What is a good APR for a credit card?

The WebBank/Fingerhut Fetti credit account

The WebBank/Fingerhut Fetti credit account is essentially a closed-loop store credit card, meaning it's an unsecured account that you can only use to shop with Fingerhut or authorized partners.

Key features include:

• No annual fee.

• An APR of 35.99%.

• A maximum $41 late and returned payment fee.

• A $30 down payment on your first purchase, which is subtracted from the total cost. Down payments can’t be paid with a credit card.

• Reporting to all three major credit bureaus. That means good payment behavior can help your credit scores. 

• A $1.99 paper statement fee. Customers can avoid this charge by opting in to electronic statements.

WebBank/Fingerhut FreshStart installment loan

As mentioned earlier, you may receive the WebBank/Fingerhunt FreshStart installment loan if you didn’t qualify for the WebBank/Fingerhut Fetti credit account.

Getting a FreshStart installment loan requires three steps:

• Make a one-time purchase of at least $50.

• Then, make a minimum $30 down payment to have your order shipped.

• Pay off the balance in either six or eight monthly payments.

If you pay off your purchase in that time frame or earlier without any late payments, you’ll be upgraded to a WebBank/Fingerhut credit account. However, if you pay off the entire balance when you make the down payment, you won't qualify for the loan or for a potential upgrade.

It's unclear whether the installment loan charges an annual fee or reports to credit bureaus. Efforts by NerdWallet to confirm with WebBank were unsuccessful.

Shopping with Fingerhut

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

But buyers, beware: Fingerhut prices are very high. While a Fingerhut store credit card may be easier to get, you'll pay a premium for the privilege to shop the catalog.

NerdWallet checked the prices of goods in different categories including appliances, video games and bedding. Without exception, Fingerhut's prices were significantly more than Amazon’s.

For example, as of this writing, Fingerhut sells a Dyson cordless vacuum for $894.99. The same model costs $459.95 on Amazon. For an item at that price point, payments are $59.99 per month. Without any finance charges, it would take you almost 15 months to pay off the balance.

But if you carry a balance month to month, you’ll pay an absolutely absurd 35.99% APR. According to Fingerhut's own cost of ownership chart, an item that costs between $800 and $899.99 and is charged a 35.99% APR will take 21 months to pay off given a monthly payment of $59.99. Total amount paid for your new Dyson: $1,213.45.

And then there's Fingerhut’s expensive shipping charges. According to Fingerhut’s shipping and handling chart, you’ll pay $44.99 to have the Dyson mailed to you. Of course, plenty of retailers including Amazon and Walmart offer free shipping for items over a certain price.

Alternatives to a Fingerhut credit account

It's tempting to get a credit card from a company claiming it’s a gateway to a “better credit future,” but there are other options that likely make better financial sense.

If you really want a store credit card, consider the Amazon secured card. It requires a security deposit of at least $100, but you can get the entire amount back when you close the account. It also reports to all three credit bureaus, and the APR is capped at 10%.

Another option is the Discover it® Secured Credit Card. Unlike the Amazon Secured and Fingerhut Fetti accounts, it can be used anywhere Discover is accepted.

The annual fee is $0, and the card 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: INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.