Fingerhut Credit Account issued by WebBank review: Decent for online shopping if you have bad credit

A secured credit card like the Discover it® Secured Credit Card offers cash back and automatic account reviews your account to see if you’re eligible to graduate to an unsecured card. The security deposit may be refunded down the road, and you’ll likely save more given Fingerhut’s higher rates and fees on their credit accounts and merchandise. 

Both accounts also have different credit limit structures. The Discover it® Secured Credit Card's credit limit is determined by the security deposit provided by the cardholder, often starting at $200. In contrast, the Fingerhut Credit Account has a variable credit limit, based on your creditworthiness and Fingerhut's discretion. The Discover it® Secured Credit Card also offers the potential for a credit limit increase over time with responsible card usage.

The Discover it® Secured Credit Card provides a broader range of usability, rewards and credit-building opportunities, while the Fingerhut Credit Account offers accessibility if you have bad credit without requiring a security deposit.

Both the Fingerhut Credit Account and the Mission Lane Visa® Credit Card can be beneficial if you want to rebuild or establish credit. Both cards offer no rewards, but the Fingerhut Credit Account is specific to the Fingerhut online store, so you can only make purchases exclusively from their product catalog. On the other hand, the Mission Lane Visa® Credit Card is a traditional credit card with a variable APR that you can use for purchases at any merchant that accepts Visa.

The Mission Lane Visa® Credit Card also offers more credit-building features, such as financial education tools and an opportunity for a credit line increase after an account review, while the Fingerhut Credit Account only reports your activity to the credit bureaus, which is a typical feature of many credit accounts. 

Overall, the Fingerhut Credit Account is more specialized for shopping with Fingerhut, while the Mission Lane Visa® Credit Card offers broader usability and potentially more perks.

The Fingerhut Credit Account may be a decent choice if you have limited options due to your credit history. The Fingerhut Credit Account is accessible if you have bad credit and can provide an opportunity to build credit through responsible card usage. While it has limited usability, it offers a flexible payment plan and could be a lifesaver if you need to make an essential purchase but don’t have the cash or a traditional credit card. Additionally, the Fingerhut Credit Account does not require a security deposit, making it easier for you to access credit without tying up funds. 

The Fingerhut Credit Account may be a good option if you enjoy online shopping with Fingerhut. This account offers a convenient way to make purchases from a wide variety of products available on the Fingerhut website, ranging from electronics and home goods to clothing and accessories, while allowing you to finance these purchases through a line of credit. 

A student or credit-building card’s cost has a large influence on its overall score. 

Students already face a ton of expenses, so extra card costs are best avoided if possible, and people with limited or damaged credit tend often find the cards they can qualify for are much pricier than traditional credit cards designed for people with a good or better credit score. 

We compare a card’s total cost, including any annual fees, account activation fees, monthly fees and more against the total cost of other cards in this category and assign each card a score based on its affordability. We also factor rewards-earning potential into our assessment of a credit-building card’s total cost, subtracting a card’s expected earnings from the sum of its fees. 

To get a sense of a card’s rewards-earning potential, we estimate its average annual rewards rate and average annual earnings based on the most popular spending categories (as covered in the latest Bureau of Labor Statistics consumer spending report). 

However, we use a slightly lower spending assumption ($300 per month or $3,600 per year) to estimate average earnings, assuming students and credit-builders will start out with a lower credit limit, will want to keep credit utilization low and will focus primarily on small purchases they can easily pay off.

Given the many costs students face — from textbooks to laptops — the presence of an introductory APR on purchases or balance transfers also plays a role in a student card’s score.

A card’s APR is also a major factor in its credit-building score. Each card’s average APR is compared against the average APR of other cards in the category, and the cards with lower-than-average APRs receive a higher rating. 

Though high APRs are hard to avoid when you’re just starting out or working on your score, credit-builders should strive for as low an APR as possible since they’re likely to either be new to managing cards or trying to establish better financial habits and avoid falling into debt.

Along with a credit-building card’s cost, our rating system takes into account how easy the card makes it to build credit. To assess this, we evaluate its credit limit potential and minimum deposit requirement.

Unsecured cards with a high starting credit limit and secured cards that let you put down a large deposit and get a matching high credit limit will score the highest according to our “Ease of building credit” rubric and are more likely to appear on our list. 

This is because a high credit limit can make it much easier to keep your credit utilization low, a primary credit-building factor that makes up 30 percent of your FICO credit score. 

Secured cards have a slight advantage in this category since the maximum credit limit on a secured card tends to be much higher than the typical starting credit limit on an unsecured card that’s available with a bad or fair credit score. However, unsecured credit-building cards have the upper hand in another key aspect of building credit: accessibility. 

Cards that carry no or a low deposit requirement can also receive a high score according to our “Ease of building credit” rubric since these cards offer a lower barrier to entry than secured cards that require you to put up hundreds of dollars in an upfront deposit. 

Indeed, some users may prefer to pay a non-refundable $50 annual fee while they work on their credit score than tie up hundreds in a refundable security deposit.

We also evaluate each card’s benefits based on how useful they are for students or someone looking to build a positive credit history and save money on everyday spending. 

We consider the inclusion of a rewards program, student-centric perks and access to your credit score or a credit monitoring service of prime importance, along with the ability to prequalify for the card with only a soft credit pull and a clear path to increase your credit limit or graduate to an unsecured or full-fledged rewards card.

Cards that include these benefits are likely to score higher according to our credit-building card scoring rubric.