Fingerhut Advantage Credit Account Review
By: Alexandria White
Updated on: Dec 20, 2018
*Editorial Note: This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.
This article was last updated Dec 20, 2018, but some terms and conditions may have changed or are no longer available. For the most accurate and up to date information please consult the terms and conditions found on the issuer website.
When you have less-than-stellar credit or no credit at all, you may struggle to be approved for credit cards. If you’ve found yourself in that situation, you may have come across Fingerhut in your search for ways to build credit.
Fingerhut is an online shopping site that extends credit to consumers through two credit accounts — the Fingerhut Advantage Revolving Credit Account and the Fingerhut FreshStart® Credit Account. There is no annual fee or monthly fee for either account.
At a quick glance, it can be easy to confuse these two accounts for credit cards, but a closer look shows various differences. Instead of receiving a traditional credit card that you can use to make purchases nearly anywhere, applicants who are approved for a Fingerhut account either receive a revolving credit account or an installment loan account that can only be used to make purchases on Fingerhut’s online site and occasionally select Fingerhut partners. Fingerhut sells over 450,000 products, from kitchen appliances to electronics to clothing, including popular brands such as Samsung, Dyson, Skechers, KitchenAid and more.
The one upside is that Fingerhut reports payment history to all three credit bureaus — TransUnion, Experian and Equifax. So, if you apply for credit and make on-time payments each month, this activity will be reported to the credit bureaus, helping you build credit. However, if you fail to make on-time payments, this will also be reported and your credit score will be negatively affected.
We’ll review how the two Fingerhut accounts work and provide better alternatives for rebuilding or establishing credit.
How Fingerhut works
When you submit an application on Fingerhut, you’ll be applying for both the Fingerhut Advantage Revolving Credit Account and the Fingerhut FreshStart® Credit Account. A closer look at the terms show that you will first be considered for the Fingerhut Advantage Revolving Credit Account, then if you don’t qualify for that account, Fingerhut will see if you qualify for the Fingerhut FreshStart® Credit Account.
Fingerhut’s two credit accounts provide you with either a revolving credit account (Fingerhut Advantage Revolving Credit Account) or an installment loan (Fingerhut FreshStart® Credit Account). Both accounts only apply to purchases on Fingerhut’s online website and occasionally select Fingerhut partners. In comparison, a typical credit card would extend you a line of credit and let you use it nearly anywhere the card’s network — American Express, Visa, Mastercard or Discover — is accepted.
Here’s how each account works:
Fingerhut Advantage Revolving Credit Account
The Fingerhut Advantage Revolving Credit Account is the account that’s most similar to a credit card. You receive a line of credit that can be used to purchases items on fingerhut.com. Each month, you’ll receive a bill for all the purchases you made during that billing cycle. Like a credit card, you can pay off your balance without accruing interest during the grace period, currently at least 24 days after the close of each billing cycle.
If you make purchases on Fingerhut and always pay your bill on time and and in full, you won’t incur late fees or interest charges, which is great since there’s a high 29.99% fixed APR. You can build credit through on-time payments made with Fingerhut Advantage Revolving Credit Account, but remember that you’ll still be overpaying for the items you purchased if you don’t pay the balance off in full every month.
Note: When you place your first order, you may or may not be required to make a one-time down payment. Fingerhut states this isn’t a fee and counts toward your order.
Fingerhut FreshStart® Credit Account
The other account you may qualify for is the Fingerhut FreshStart® Credit Account, a three-step installment loan account. After you’re approved, you can make purchases up to your credit limit. Then, you need to make a $30 down payment in order for your item to ship. Lastly, you must make preset monthly payments until your balance is paid off.
The monthly payment will be calculated at the time of purchase based on your order amount, plus shipping and handling, taxes and finance charges. The total purchase amount minus the $30 down payment will be split equally over the remaining monthly payments. After you place your first order, you will receive an installment loan agreement in the mail that includes the anticipated monthly payments and you can easily check your monthly payment amount online.
Here’s the example Fingerhut provides on preset monthly payments:
| Cash price (the cost of the item(s) you purchase) | $50 | $100 |
| Down payment | $30 | $30 |
| Finance charge | $1.79 | $6.25 |
| Terms of repayment | 6 monthly payments of $3.63 | 6 monthly payments of $12.71 |
What to watch out for
Overpriced merchandise. The merchandise listed for sale on Fingerhut is notably more expensive than other retailers. For example, a KitchenAid Artisan 5-Qt. Stand Mixer will cost you $469.99 on Fingerhut, but a quick Google search shows numerous other retailers selling the same mixer for $219.99-$379.99. It doesn’t make sense to overpay for products on Fingerhut just because you want to build credit. You can choose another way to build credit, such as applying for a secured card (which requires a deposit) or becoming an authorized user on someone’s account.
High 29.99% fixed APR. The Fingerhut Advantage Revolving Credit Account has an extremely high interest rate of 29.99% fixed APR. According to CompareCards.com’s credit card statistics survey, this is nearly double the average APR for new credit card accounts (16.91%) and about 5% higher than the average APR for store cards (24.97%). If you carry a balance month to month on the Fingerhut Advantage Revolving Credit Account, you’ll incur high interest charges that could substantially add to the original cost of whatever you bought.
Better alternatives for building credit
Opening an account with Fingerhut isn’t the best way to build credit. You’ll end up paying more than you should for items and can accrue high interest charges. As a result, we recommend you consider alternative ways to build credit.
Become an authorized user
If you’ve struggled to be approved for any type of credit, your best bet may be to ask a trusted family member or close friend to add you as an authorized user on their credit card. Before you become an authorized user, make sure the account of the person you are being added to is in good standing, meaning they pay their bills on time and don’t carry a large balance. Otherwise, you’ll be doing more harm than good since the account’s history will show up on your credit report. After they add you as an authorized user, you can piggyback off of their good credit and receive your own credit card to make purchases.
As an authorized user, you aren’t legally liable for making payments, since that’s the primary account holder’s responsibility. Regardless, you should be considerate by keeping spending to a minimum and repaying what you charge. Even better, don’t even use the card as that’s not necessary for the account to show up on your credit file. Becoming an authorized user is a great way to get your feet wet with a credit card and can help you build a decent credit score. Once you have built some credit, you can consider opening your own credit card or secured card.
Secured card
A secured card is just like a traditional, unsecured credit card, but there’s one difference — secured cards require a security deposit that typically becomes your line of credit. For example, if the card requires a $200 minimum security deposit, your credit limit will be $200. Some cards allow you a larger limit than the deposit, and may “graduate” you to an unsecured card after showing yourself to be responsible with the card by keeping the balance low and paying it off every month.
Once you receive your card, you can use it to make new purchases just like a regular credit card. Your security deposit is refundable if you pay off your balance and close your account or are upgraded to an unsecured card. After you’ve built credit with a secured card, you may be automatically transitioned to an unsecured card, or you can apply for a credit card.
Here are our recommended secured cards:
Credit cards for bad credit
If have bad credit, you may struggle to be approved for a credit card, but a helpful feature many credit cards for bad credit have is prequalification. With prequalification, you can check to see if you qualify for a credit card without hurting your credit score. This is a great way to check approval odds and compare offers, but know that prequalification is not a guarantee of approval. You’ll still need to submit a formal credit card application that will perform a hard pull of your credit.
Also, beware that many credit cards for bad credit have annual fees, but if you use them responsibly to build credit, you can establish a good credit score and apply for better, no annual fee credit cards down the line.
Here are our recommended credit cards for no or bad credit:
Bottom line
Fingerhut is a subprime lender that targets consumers who have struggled to be approved for credit cards by saying you can “get the credit you deserve” and “apply and get an instant decision.” These statements can be tempting if you’ve been denied for credit in the past, but we advise you to avoid Fingerhut altogether. You’ll end up paying more for nearly all the merchandise on their site and you can incur high interest charges. A better way to build credit is to consider secured cards, credit cards for bad credit or becoming an authorized user on a family member’s account.
