Keep Credit Utilization Low
Another factor to consider is credit utilization, you really want to keep this under 3% of total credit if you can but try to never get it over 15%.
For example, if you have 3 credit cards with $1,000 limits on each of them, your total credit is $3,000.
If you spend $500.00 the percentage of credit you are utilizing is around 16.6% and is above the recommended credit utilization, so be mindful of how much you spend.
Fingerhut Freshstart Credit Account Review
Depending on your credit, you could initially get approved for the Fingerhut FreshStart® Account.
This account is a type of Installment loan and is set up with taking 3 steps:
- Make a one-time purchase of at least $50.
- Put a minimum of $30 as a down payment on your order and only a debit card, ACH payment, a paper check or a money order can be used for your down payment.
- Pay off the balance in monthly payments split into either six or eight payments.
Once you have your first item purchased, in order to get your account upgraded to an Advantage Account, you need to make on-time payments over several months.
Dont pay off the item all at one time or you wont be able to qualify for the upgrade.
Below should give you an idea of the fees involved:
|FreshStart Account Fees|
|6 monthly payments of $3.63||6 monthly payments of $21.78|
In my personal opinion, purchasing something you need and paying a small fee over time, to establish credit is 100% worth it. Just be sure to make your payments on time.
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Fingerhut Advantage Revolving Credit Account
The Advantage account is a revolving account, just like a traditional credit card, but it comes with a steep interest rate of 29.99% APR. In order to avoid interest charges on purchases, pay your statement balance in full every billing cycle.
When you place your first order,you may be required to pay a portion of it right away, using a debit card, linked bank account or other eligible payment option , which Fingerhut refers to as a one-time down payment. The amount you deposit reduces your total balance.
Then, just like a regular credit card, you’ll receive a statement every billing cycle. You’ll need to pay the balance off in full and on time in order to avoid paying interest charges.
How An Unused Fingerhut Account Affects Credit Scores
If a revolving credit account is unused but open, it still impacts your credit score. First, the limit on that account is part of your available credit, a number that shows how much credit you can access practically immediately. Second, it affects your credit utilization ratio, a reflection of how much available credit you have, and how much credit you are using.
Both your available credit amount and credit utilization ratio are part of your credit score calculations. In some cases, your available credit amount can harm your credit or, at least, make it harder to obtain new credit. However, that depends on a variety of factors, including how large your Fingerhut credit line is and how much other credit you have available.
The impact of your credit utilization ratio can be fairly dramatic. If your unused Fingerhut account helps you keep your ratio low, say at 30 percent or less, its having a positive impact in that area. If, by closing your Fingerhut account, your credit utilization goes up substantially, then leaving it open might be a better choice.
Finally, your Fingerhut accounts age plays a role in your credit score. The average age of your accounts does impact your credit. Usually, the higher the average age, the better. If closing your account lowers the average age of your open accounts, such a move could cause your score to fall.
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Insider Advice: Getting The Most Out Of Your Card
- Consider the SafeLine Plan: If you suspect that you may have difficulty making on-time monthly payments, consider enrolling in the SafeLine plan which provides insurance in the event of certain qualifying life events.
- Be responsible to build your credit: Youll improve your credit by always paying your bills on time. We recommend paying the statement balance in full each month to avoid interest, rather than just making the minimum payment, but if you cant manage that you should try to pay as much as possible each month.
- For Fingerhut only: This card can only be used for purchases from Fingerhut, or for offers from select Fingerhut partners.
- Comparison shop: Fingerhut is known for having high prices, although occasionally you can find a good deal. Before making purchases you should check with other retailers, like Walmart and , to make sure youre getting the best available price.
Here Are The Fingerhut Credit Card Approval Requirements:
- Applicants with bad can be accepted
- 18+ years old
- Not a member of a consumer credit counseling service
- No past-due minimum payments while in the Fingerhut FreshStart program
- No foreclosure, tax liens or other derogatory marks on your credit
As long as you avoid the negatives, you should have a good chance of Fingerhut Credit Card approval. And the best part about the process is if youre not qualified for the card, Fingerhut might instead enroll you in their FreshStart program.
With this program, youll be able to make a Fingerhut purchase between $50 and the spending limit they give you. You must make a down payment of at least $50 toward the balance, and then pay off the rest in the time limit they specify after . After you finish paying the balance off, as long as you werent late with any payments, youll graduate to the regular Fingerhut Credit Card. The FreshStart program doesnt report to the credit bureaus, but the regular account youll get afterward does.
So, a Fingerhut Credit Card is easy to get approved for and itll help you rebuild your credit. And to top it off, theres a $0 annual fee. But the only issue is that you can only use the card for Fingerhut purchases. If youre looking for a card you can use anywhere, there are several good options available.
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How The Td Cash Secured Credit Card Works
- Apply onlineIf qualified, you’ll receive conditional approval
- Make a security depositOnce conditionally approved you’ll open a TD Simple Savings account and make a deposit to secure your credit line
- Set your credit limitYour security deposit is your credit limit. That means you can decide the amount that’s best for youfrom $300$5,000, subject to credit approval
- Graduate to an unsecured cardIf you use and maintain the card and keep it in good standing, you may be eligible to graduate to an unsecured TD Bank Credit Card. Please keep in mind, not all accounts qualify for graduation. A decision to graduate is based on responsible credit management across all of your credit cards and loans, including TD and others.
How Fingerhut Credit Options Work
Mainly, Fingerhut targets consumers with less-than-perfect credit histories. Many have turned to the company to make purchases or even try and improve their credit scores. The company offers two main credit options: an installment loan and a store credit card-style account.
With the installment loan, the credit line is somewhat finite in nature. Usually, this account helps borrowers show that they can repay what they owe responsibly. After making a purchase, the borrower repays the principal and any applicable finance charges. Then, once they finish repaying, they might qualify for the store card-style account.
The credit account functions like a store credit card. Its revolving, so users can make additional purchases whenever theres enough room on their account. This option comes with a pretty high annual interest rate of 29.99 percent.
If a borrower keeps using their Fingerhut credit account responsibly, they might be able to convert their store card into a regular credit card. Then, they can use it at stores besides Fingerhut.
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How To Get The Most Out Of This Card
Since the Fingerhut Credit Card comes with a high interest rate, your best bet is to use it for small purchases you can pay off before interest begins to accrue, or shortly thereafter. After a few months of regular useand regular, on-time paymentsyour credit score will begin to tick up and you can begin to search for a traditional credit card with better terms.
While this card does not provide you with an updated credit score to review, many banks and credit unions do. If yours doesnt, consider switching to one that does, or look for a free credit score offered by a large credit card issuer . Most are free, and you dont have to have an account to sign up.
If you have poor credit and need a card that you can use at places besides Fingerhut, you may want to consider a secured credit card. With a secured credit card, you have to pay a deposit before you can use the card, but it may be much more widely accepted than this card and may even let you earn rewards.
Opensky Secured Visa Credit Card
The OpenSky Secured Visa credit card requires a $200 security deposit, but you don’t need a credit check or a bank account to qualify. OpenSky also reports to all three credit bureaus, so you can use your card to repair your credit score.
Even better, the OpenSky credit card is a Visa, which means you can use it to make purchases wherever Visa is accepted. The annual fee is $35, and the APR is 18.89%, which is low compared to most cards marketed toward individuals with bad credit.
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Fingerhut Payment Rewards Program
While it isnt your typical rewards program, it is something, and the best thing about this program is that once you are enrolled in it, it works automatically.
This program is for the Advantage account and gives you the ability to earn 10% towards Payment Rewards when you make payments on your account.
If you earn $5.00 or more in rewards by the end of the 3-month period you will be given Payment rewards in that amount that can be redeemed on a new Fingerhut purchase.
What Credit Score Do You Need For A Fingerhut Account
There is no minimum Fingerhut credit score needed to obtain one of its credit accounts. These accounts allow you to purchase goods and services at Fingerhut and selected partners. If youd prefer to own a credit card, we review five credit cards that are fairly easy to acquire, even if you have bad credit.
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Why It Could Be Better
- Fingerhut merchandise tends to be more expensive than usual
- Many reports of poor customer service
The Fingerhut Advantage Credit Account could be a good pick if youve had trouble being approved for credit cards, but there are some other options that could be more useful if you qualify. Check out some other cards designed to help improve your credit below.
How Fingerhut Credit Accounts Work
Fingerhut offers two types of accounts: the Fingerhut Advantage Revolving Credit Account and the Fingerhut FreshStart Credit Account. Both accounts can only be used to purchase items through Fingerhut’s online site. You won’t be able to use Fingerhut accounts anywhere else, which is similar to if you opened a store card at certain retailers.
The merchandise you can purchase on Fingerhut can be more expensive than other retailers. For example, a Cuisinart Round Waffle Maker currently costs $49.99 on Fingerhut, but a quick online search shows numerous other retailers selling the same waffle maker for much less with Bed Bath & Beyond charging just $29.99.
While there are no annual fees or application fees to open a Fingerhut account, you may incur interest charges on balances that aren’t paid in full and on late payments.
When you submit an application, you’ll first be considered for the Fingerhut Advantage Revolving Credit Account, then if you don’t qualify for that account you will automatically be considered for the Fingerhut FreshStart Credit Account.
Below, we breakdown how the two accounts work.
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Fingerhut Credit Card Review
FingerHut originally started as a mail order catalog, and in the 90s became an early entry into the e-commerce game.
But what FingerHut is really known for is that it allows customers with poor-to-nonexistent credit to purchase items right away on FingerHuts line of credit, and then make monthly payments. FingerHut promotes this feature as a way for people to build credit or rehabilitate a bad credit rating. But is FingerHut really the best option for people who are starting out, or trying to start over?
Why Is Fingerhut Suggested For Building Credit
The main selling point is that the company is willing to extend a line of credit to people who have a poor credit history. FingerHut makes it a point of pride that they will extend credit to someone even if theyve been turned down by other credit card companies.
If you can meet your monthly payments and pay your item off within six to eight months, it can help you build your credit history back up, as FingerHut reports your payments to the three major consumer credit bureaus: Equifax, Experian and TransUnion.
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How To Cancel Your Fingerhut Account
Fingerhuts terms state that you must send Fingerhut a written letter to cancel your account. However, we recommend giving them a call at to see if they can cancel your account over the phone. If that doesnt work, youll need to send a letter to:
WebBankP.O. Box 0260St Cloud, MN 56395-0260
You must cut your card in half and send it in along with the cancellation request.
What Is A Hard Inquiry
A hard inquiry occurs any time you apply for new credit and the lender or creditor runs a credit check. It can be for a mortgage, apartment, car loan, credit card, insurance policy, cell phone, and sometimes even a job application.
Hard inquiries will typically only drop your credit score by a few points. However, if you have too many, especially in a short period of time, they can really start to add up and do some damage.
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Taking Action On Your Credit
Hopefully, you found this Fingerhut Credit Review helpful because store Cards or Catalog Accounts are a great option to help build or rebuild your credit.
There is no better time than now to get things started and the sooner you get your accounts, the faster it will hit your report and start helping you.
Still not convinced?
Read about how Fingerhut credit helped my business partner increase his credit score by 100 points!
Or, start building your credit today with a Fingerhut Account!
Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements, or recommendations expressed in this article are those of the authors alone, and may not have been reviewed, approved, or otherwise endorsed by any of these entities prior to publication.
Where Can You Use A Fingerhut Credit Card
One of the main drawbacks of the Fingerhut credit card is that you can only use it to make purchases from the Fingerhut store. While Fingerhut says it offers the opportunity to buy from “select partners” from time to time, the company’s website doesn’t offer a list of these partners beyond saying they include “florists, insurance companies and others.”
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How To Use The Fingerhut Credit Account
While we dont recommend the Fingerhut Account, if you do get it, or already have it, you should only use it to make purchases you were already planning anyway and be aware that youre paying a potential markup to purchase on Fingerhut.
As with every credit card, but especially a credit-building card like this one, it is essential to make your monthly payments on time and in full, and dont spend close to or beyond your assigned credit limit. You should aim to keep your under spending 30% or less of your available credit to maintain an optimal credit utilization ratio. And remember to never charge more to your Fingerhut Credit Account than you can afford to pay off each month, before the steep 29.99% interest rate kicks in on your balance. Accruing interest at that rate can quickly lead to high debts and even more difficulty improving your credit.
How Does Fingerhut Compare To Other Credit Cards For Bad Credit
Considering the high price of the items and the limited use of FingerHuts credit cards, those looking to build their credit ratings might want to consider a few different options instead.
- Apply for a Secured Card, which comes with a deposit in case you default on payments. They are easier to qualify for if you have subprime credit, though they do come with higher than average APRs. But unlike FingerHut, you arent limited to one store, and if you meet your payments you can eventually qualify for an unsecured card.
- If you have a recurring payment such as a utility bill or Netflix, you can use an Experian Boost to link your bank account, and instantly get credit for payments and start quickly raising your credit score.
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