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Fingerhut: Is This Credit Building Program a Good Deal?

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Are you trying to rebuild your credit? Fingerhut, an online retailer, says it wants to help with its FreshStart program, a new twist on the old “catalog card” offers that have come and gone over the years.

Designed for customers who have been turned down for Fingerhut’s credit card, it gives customers a second shot at proving their creditworthiness so they can qualify for Fingerhut’s regular credit cards.

But is it any good? Here’s how Fingerhut describes the program:

  • Fingerhut FreshStart® is an installment credit program.
  • You begin with a one-time purchase. This purchase is between $50 and your credit limit. You can choose the products you like in your price range.
  • You make a $30 down payment when you place your order.
  • You pay off the balance in six or eight easy monthly payments. You may pay it off even faster, if you’d like!
  • When you’ve paid off your balance, with each monthly payment on-time, and in full, you graduate to a regular (revolving) WebBank/Fingerhut Credit Account with a larger credit line.
  • It’s that easy. There’s no catch. You are simply rewarded for being a good Fingerhut customer.

This program looks like a more legitimate version of “catalog card” programs that are marketed as credit cards for rebuilding credit, but can only be used to shop from the issuer’s catalogs. With those offers, the merchandise is often severely overpriced and customers usually find little benefit in rebuilding their credit.

Fingerhut, on the other hand, has a popular catalog that has been around for a long time and has a loyal following among its customers. Presumably some of those customers have been hit hard by the economic downturn, so much so that they are turned down for Fingerhut’s traditional credit card program. To keep them shopping, Fingerhut came up with this program. From that standpoint it’s brilliant; they don’t have to turn shoppers away. (It’s probably also no coincidence that the program is launching at the start of the holiday shopping season.)

But the biggest concern for customers is that they will just focus on the small down payment and monthly payments, and lose track of how much they are really spending. When they do, they’ll pay interest. So instead of buying an item on sale, they are paying more by the time the bill is paid off. The interest rate is 24.99%, which is not unusual for a retail card or credit cards for those with bad credit, but it’s high compared to the average credit card rate of about 15%.

And you may not be able to get out of paying at least some interest on purchases. While the marketing materials says purchases can be paid off faster, the terms and conditions warn:

However, if you elect to pay your entire balance due at the same time as your down payment, then this will cancel your Loan and you may not be eligible to be considered for a WebBank/Fingerhut Credit Account. You may not be eligible to be considered for a WebBank/Fingerhut Credit Account if you die, file for bankruptcy, enter a consumer credit counseling service program, make any past due payments, or have any payments returned unpaid, or if you enter any other negative credit status. (Emphasis added.)

Customers who don’t read the offer carefully may miss the fact that they are not building credit with anyone other than Fingerhut when using the FreshStart program. They must pay off purchases under this program on time before graduating to the regular card. It’s not designed to be a way to build credit references with the major credit reporting agencies.

This program is fairly new, so I haven’t heard complaints about it. I also haven’t heard many complaints about their credit card, which may be due to the relatively small number of cardholders who carry it. When I searched the web for Fingerhut complaints, I found a few such as this one:

Calling and harassing wife who has had a massive stroke over $19.17 the total amount for the product is 130.00+ interest!. It is difficult for my wife to speak, yet this person insisted on talking to her and kept her on the phone while he kept making mistakes concerning the issue. She cannot hold a phone at any length of time and speaking is extremely hard for her. We are on Social Security and send our payments per money order yet if it’s not there on the date they require, they call and harass my wife.

So what’s my take? If you really love shopping at Fingerhut and you can’t qualify for one of their credit cards, then you may want to try the Fingerhut FreshStart program for rebuilding your credit. Limit yourself to a small purchase of something you’d buy anyway and pay it off as quickly as you can. But if what you really want is a credit card to rebuild credit, get a secured card and pay the balance in full each month.

Image: shawnzrossi, via Flickr

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  • Diane Dunn

    I need to make a down payment to open my credit thank

  • Rodney Nelson

    I would like to refute some of these erroneus claims. I am about to finish off my FreshStart program through fingerhut and I am highly pleased. Not only because I got to get something nice for the woman I love and make payments. My credit score jumped 9 points after making my first payment to them. After that my credit jumped 36 pts. Ive gone from bad to good credit and qualified for a Zales credit card all by starting out this way. It does help your credit if ALL payments are made on time

    • Gerri Detweiler

      That’s great to know Rodney. How exactly did it work for you? I assume you graduated to the Fingerhut card, so that your info will be reported to the credit reporting agencies, correct?

      • Bleusky Label

        Fresh start program reports to the credit agency

      • Chris Schlagal

        i started with 180 freshstart then payed it off in 2 payments now i have 200 for a regular credit account.

    • John Iii

      Jumping a whole 9 points had NOTHING to do with Fingerhut. What happened is your bad debts aged enough that improved your score. They don’t report while your under Freshstart. They just prove how little folks actually know about credit.

      • Cjackson

        Fingerhut freshstart does report to the credit agencies.

        • Gerri Detweiler

          Cjackson – have you used it? Curious to hear about your experience.

  • Bill Collectors Hate Me

    I agree with Rodney. Fingerhut is a great option to help rebuild credit. I’ve used them solely for that purpose and they have been very helpful in improving my credit score! I highly recommend Fingerhut!

  • Amber Adams

    I also have a Fingerhut Fresh Start credit account. Fingerhut’s description for the credit account states that they report to the 3 major credit bureaus. I made my first payment at the end of last month and did notice that my credit score increased 11 points after that first payment and I am sure that is what had to increase my score because I do not have credit anywhere else! The interest rate may be a little higher than other credit companies but Fingerhut does carry some very nice products! Since it also helps build your credit, it is worth paying the higher interest rate, especially if you make a smaller purchase and pay it off after 90 days! I personally contacted Fingerhut concerning the issue of paying your purchase off early and was informed as long as you do not pay it off before 90 days (wait at least 91 days which means make 3 installment payments), it will not affect your ability to get a revolving Fingerhut Credit Account and they will still report to the credit bureaus.

  • Credit Experts

    Teo —
    Your first move should be to write to the credit card company and ask them to correct your account information in their records. (It would be a good idea to do this registered mail.) Then, when they report the account, they should report the correct SSN, that should make it match to your credit report. Please document all your correspondence.

    Give them a couple of months to fix the records, and then request a copy of your credit report to confirm that is it reporting correctly (or to have the wrong SSN removed if it is somehow associated with your name).

  • Monica Brandt

    Can this program help me build good credit

    • John Iii


    • chris

      Yes it has mine. I started with a credit score of a 520 and close to a year later im at a 581 because the do report to the credit agencies

  • Monica Brandt

    I would like to be given a chance to be apart of the fresh start progra




    • Credit Experts

      Ricardo —
      The people who could answer your questions best would be the credit card issuers. We cannot tell you which credit reporting agencies receive which report. You can — and it sounds like you are — checking your reports yourself (you are entitled to one free one per year from each of the three major credit reporting agencies). But it may well be that you need to give it a bit more time. This post addresses the time it takes for your score to reflect changes:
      Credit Score Updates: How Long Will It Take?

  • Britt Cone

    Not true, Mike West. They now carry tons of brand name items, and they are not “cheap”, “old” or “discontinued”- I have bought two brand name items that were within the normal price range and new on the market. They used to carry cheap junk. Check the website before posting.

  • John Iii

    I don’t think i’m gonna care if i’m turned down when i’m dead.. but eh maybe that is just me

  • Gerri Detweiler

    Tavoa – Are you trying to build your credit scores? If so, have you checked what your credit scores are? You can
    get your free credit score here. I’d recommend you get yours and see where you stand. This isn’t the only way to build credit.

  • downtowndcmilan

    You can not expect them to throw you an increase making the minimum payment each month. You have to pay the entire balance the next bill due date. Maybe will have better luck with smaller priced items. It’ll work, Give it a try.

  • Tonia

    I got a vacuum cleaner with the fresh start account. That was Feb 2013. Paid it off, July 2013 they gave me a reg. account with a 250.00 credit line. Now its Dec 2014 and my credit limit with them is 1750! They give credit line increases often, tons of name brand items. Key is to buy when they offer free shipping or you pay way to much!!

    • Gerri Detweiler

      Good to know. Thanks for sharing your experience.

  • Credit Experts

    Good to hear it’s working out for you.

  • Gerri Detweiler

    Good to know! Thanks.

  • Gerri Detweiler

    She might want to try to file a complaint with the Consumer Financial Protection Bureau.

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