You’ve probably heard of Fingerhut at some point, right? But do you know how Fingerhut actually works?
Is Fingerhut a good move for someone with bad credit? And what are the qualifications in order to be approved?
We’ll go over all of this and more so you can decide if this is the right choice for you.
We’re going to cover:
- What is Fingerhut?
- How Fingerhut Works
- How Does Fingerhut Help Your Credit?
- Pros & Cons
- How To Apply To Fingerhut
What is Fingerhut?
Fingerhut is a catalog and online retailer that offers credit accounts with low monthly payments on purchases made through their online shopping website, catalog, or over the phone.
Fingerhut’s catalog offers more than 700,000 products, including many well known brands.
Fingerhut uses WebBank as their financial institution to offer credit accounts. These credit accounts are designed to help you build credit. So if you identify with this, Fingerhut might be what you are looking for.
Fingerhut has you qualify for one of the company’s credit accounts. Once you’ve qualified, you are given the ability to purchase items sold through their catalog or online site.
When you make a purchase, you’ll be given a monthly payment of X dollars, until the item is paid in full with interest.
Where Can Fingerhut Credit Card Be Used?
The Fingerhut credit card can only be used on purchases made through Fingerhut or its selected partners. Purchases can be made through the catalog, online, or over the phone.
There are many reasons certain credit cards can be useful to those with bad credit.
📈 They help you rebuild your credit score.
💰 They can assist you in times of financial emergencies.
🎁 These cards even provide you with rewards.
— Get Out of Debt (@getoutofdebtcom) December 3, 2018
How Fingerhut Works
Fingerhut offers two different forms of credit:
- WebBank/Fingerhut Advantage Credit Account
- WebBank/Fingerhut FreshStart Credit Account
Let’s see what each account offers.
WebBank/Fingerhut Advantage Credit Account
- APR: 29.99% Fixed
- Late Fees: $38
- Returned Payment Fee: $38
- Annual Fee: $0
- Membership Fee: $0
- Over-Limit Fee: $0
The way to apply for the WebBank/Fingerhut Advantage Credit Account is by going to the Fingerhut website.
This card can only be used for purchases made through Fingerhut and some selected partners. And you’ll want to keep a lookout for the offers from the selected partners.
Even though the interest rate and late fees are high, you won’t have to worry about these if your purchases are paid in full before the due date. That means you’ll have 24 days after the close of the billing cycle to pay that purchase off. If you cannot, interest will start accruing.
So in other words, you’re given an interest free period of up to 24 days after the billing cycle closes with this account.
Once this period is up and you begin your monthly payments, you’ll find that Fingerhut’s payment structure differs from a traditional credit card.
With a traditional credit card, your monthly payment is calculated based off of a percentage of your balance. But, Fingerhut’s monthly payments are based solely on your balance.
So, what does that mean for you?
In the chart below, you’ll be able to see what your monthly payment would be based on your current balance.
Check it out:
So, if your balance is $100, your monthly payment will be $10.99. That jumps to $17.99 a month if you double your balance and owe $200. Keep this chart as a handy reference tool so you don’t spend more than you can afford to pay back.
WebBank/Fingerhut FreshStart Credit Account
- APR: 29.99% Fixed (subject to change)
- Late Fees: $4.90-$14.90
- Returned Payment Fee: $25
- Annual Fee: $0
- Membership Fee: $0
When you apply for a credit account with Fingerhut, you’ll first be considered for the WebBank/Fingerhut Advantage Credit Account. If you aren’t able to qualify for that one, your application will go under a second evaluation to see if you can be approved for the WebBank/Fingerhut FreshStart Credit Account.
The WeBank/Fingerhut FreshStart Credit Account works a little differently than the WebBank/Fingerhut Advantage Credit Account because it’s an installment loan.
The Fingerhut FreshStart Credit Account is a three step installment credit program that works very similar to a credit card.
How It Works
- Upon approval, you’ll be required to make a one time purchase up to your credit limit.
- You’ll then be requested to make a $30 down payment, which will allow your purchase to be shipped to you.
- Note: Credit cards are not accepted for down payments.
- Your options will be:
- A debit card
- An ACH payment
- A personal check
- A money order
- Finally, you’ll be requested to pay off the balance in the form of monthly payments.
It’s extremely important that you make all of your payments on time and in full.
By using this installment loan account responsibly, Fingerhut will see that you’re capable of handling more credit. This will allow them to consider the option of upgrading your account to the WebBank/Fingerhut Advantage Credit Account.
When you place your $30 down payment, you’ll receive an installment loan agreement which will tell you your monthly payment amount, and the length of the term. A typical term is anywhere from 6 to 8 months.
Additionally, any late payments made on this credit account will result in a charge. For balances under $50, this amount is $4.90. If your balance is over $50 and you miss a payment, you’ll be charged a $14.90 fee.
Shopping with Fingerhut works a little differently if you have the WebBank/Fingerhut FreshStart Credit Account. Instead of seeing the full retail price for the item, you’ll instead be told what your minimum monthly payment amount would be for the item.
How Does Fingerhut Help Your Credit?
The Fingerhut Credit Account issued by WebBank has basically been designed to help you build your credit.
Every time you make a payment, Fingerhut will report it to the 3 major credit bureaus. This gives you an opportunity to allow your credit score to slowly start building up.
Want to help your credit score even more?
Keep your balance as low as possible. Your credit utilization ratio, or the amount of credit you’re using opposed to your total limit, accounts for 30% of your credit score. So, the higher your balance, the lower your score will be.
If the credit accounts offered by WebBank/Fingerhut are used responsibly, it will definitely show in your credit history, and in return, improve your score.
Take your credit score from 😒 to 💪. Check out our list of 7 best credit cards for those with #NoCredit! https://t.co/24TpZ465ad#MondayMotivation #MondayMorning #financialeducation pic.twitter.com/4Nzo6Iej30
— Get Out of Debt (@getoutofdebtcom) October 1, 2018
Pros & Cons
Exploring the good and the bad is an essential part to help you to make the right decision. So let’s see what Fingerhut has to offer and how it stacks up.
- Fingerhut is known for extending credit offers to those who have previously been turned down.
- Reports your payment history to the three major credit bureaus (TransUnion, Equifax and Experian ), which will help improve your score if payments are made on time.
- Fingerhut is a good option for those who want to build their credit, even though it comes at a cost.
- You have 24 days free of interest after your new billing cycle starts.
- No annual fee
- Low monthly payments
- Products on Fingerhut may cost more than they do on other sites.
- You may receive a high APR and pay more on your balance if using Fingerhut’s credit account, than you would if you used a different credit card.
- You can’t use their card for purchases made with any other merchant.
Keep In Mind
Fingerhut will most likely approve your credit application, but it will come at a price.
Purchases made with Fingerhut may be more expensive upfront, and don’t forget to factor in the cost of interest.
So, you may be able to find these items for cheaper in other places.
But, if you are unable to qualify for credit anywhere else, it may be worth it to you to give it a shot.
How To Apply To Fingerhut
To become a Fingerhut member you need to apply directly on their site.
Scroll down until you see ‘Apply Now’ and click.
Once you’ve clicked on the link above or clicked to Apply Now, you’ll be prompted to this page:
Complete this page
Once here – You’ll need to respond to the following:
- Are you responding to a catalog offer? Yes or No
Then you’ll be asked to fill in the following personal information:
- First Name
- Middle Name
- Last Name
- Address Line 1
- Address Line 2
- Zip Code
- Primary Phone
- Secondary Phone (optional)
Next, you’ll scroll down a bit more and complete the following:
- Social Security Number
- Date of Birth
- Annual Income
- From a dropdown list, you’ll need to select one from the following:
- $1 – $10,000
- $10,001 – $20,000
- $20,001 – $30,000
- $30,001 – $40,000
- $40,001 – $50,000
- $50,001 – $60,000
- $60,001 – $70,000
- $70,001 – $80,000
- From a dropdown list, you’ll need to select one from the following:
- Choose a Password
- Re-enter your Password
This email and password will be the way you access your account moving forward. So make sure to use something that you can easily remember.
Then you’ll need to answer the following question:
- Sign up for Electronic Statements and Disclosures?
You’ll either respond:
- Yes, email me my statements and account disclosures. I have read and understand the eStatement and Electronic Disclosures Terms and Conditions above.
- No, please send my statements and account disclosures in the mail.
Now, if you’re the type of person that doesn’t like receiving mail, selecting Yes would be more convenient for you. But make sure to keep an eye to your emails, as you don’t want to miss a payment because you missed seeing the statement.
Then you’ll have to read through the:
- Fingerhut Credit Terms & Conditions
And you’ll have to click on the following check box that states the following:
- Yes I accept these terms
- I understand that I am providing authorization for WebBank to obtain information from my credit report in order to confirm my credit worthiness and identity. Clicking submit constitutes my signature to this application for credit.
And you are ready to:
Click on Submit Application
You’ll receive a decision in minutes! They tend to be pretty quick.
If you didn’t get approved for the WebBank/Fingerhut Advantage Credit Account, your application will be reconsidered for WebBank/Fingerhut FreshStart Credit Account.
All you need to do is wait and see what happens.
If you get approved, then great! You’re ready to go!
You’ll have the ability to make purchases online, so there’s no need to wait for your physical card to arrive.
But, you will typically receive your credit card in the mail within 1-2 weeks.
Is Fingerhut Worth A Try?
Fingerhut has the ability to help you increase your credit score, when it’s used the right way. Both credit accounts offered through Fingerhut report to the 3 major credit bureaus, so it’s important to make sure you keep up with your payments if you do decide to give Fingerhut a try.
If you’re struggling to raise your credit score and can use Fingerhut responsibly, it might be a good move for you!
Have you tried Fingerhut? Let us know in the comments!
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