Fingerhut: The Catalog That Made Credit a Product

calendar Nov 6, 2026 / · 7 min read · catalog-credit fingerhut  ·
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Fingerhut: a catalog that sold monthly payments

The Fingerhut homepage no longer sells anything. It is a login screen. Once signed in, a customer can view account details, make payments and open statements. Since October 2, 2025, the website has been closed for new purchases, and Fingerhut Fetti Credit Accounts, issued by WebBank, can no longer be used to buy. Anyone with a balance is still responsible for minimum monthly payments until it is paid off.

Fingerhut started in 1948 selling automobile seat covers. What set it apart from other retailers was hire purchase: goods paid for in monthly payments, similar to today's buy now, pay later model.

Until the late 1990s that credit ran on a fixed number of installments, paid off by coupon book. After customers were moved to revolving credit, unpaid bills cost Fingerhut some $400 million in 2000.

1948–1974: seat covers, a test mailing and the coupon book

Fingerhut's first marketing test went to 100 new car owners spread across Minnesota and brought back eight orders. That is an 8 percent response.

The offer had two parts. Customers got installment credit at department store rates and a free gift with every purchase, a formula aimed at lower-middle-income consumers. Shipping was free.

The billing ran on paper. At first, each purchase brought a coupon book. The customer mailed in a set number of checks, and the bill shrank to zero. This is closed-end credit: the number of payments is fixed at the sale, and the customer can count the coupons left.

One customer liked the system and said she did not seem to get behind on it. By the mid-1970s, after a quarter century of steadily rising sales, Fingerhut was selling about $100 million a year.

1974–1996: the database as underwriter

Ted Deikel took over as president in 1974, and the company started using computer databases to model consumers' credit risk and buying habits. Deikel also phased Fingerhut out of manufacturing and called for pinpoint marketing, with customers segmented by their buying preferences. By the 1980s the database and its mailings were so advanced that virtually every customer represented a specialized market.

The models showed their value in bad years. In the second quarter of 1980 its profit rose 10 percent. Over the same period, other retailers and mail-order houses posted profit declines of 18 to 43 percent.

In return for access to credit, Fingerhut charged a little more than average for its goods. The alternatives were gone: layaway plans and local store credit, once common in retailing, had disappeared over time.

In 1994 the database moved into banking. Fingerhut launched a cobranded Fingerhut/MasterCard credit card. Through its database, Fingerhut found good card prospects whom banks and other card issuers had largely overlooked. By 1996 Fingerhut was one of the 25 largest credit card issuers in the United States. Its financial services arm, Metris Companies, went public in an initial offering that raised an estimated $45 million.

As of 2001, Fingerhut counted an active customer base of 31 million people.

1997–2002: from coupon books to revolving cards

In 1997 Fingerhut began converting customers from close-ended installment plans to open-ended revolving credit, and the installment plan ended one month after the 1999 sale to Federated. The coupons went and credit cards replaced them.

Federated Department Stores, now Macy's Inc., bought Fingerhut in 1999 for $1.7 billion. In 1998, the year before the sale, Fingerhut's sales were $1.61 billion. Federated wanted its warehouses and fulfillment system to handle millions of online orders for its department stores. It also had a plan for the customers: Fingerhut buyers would be "graduated" into Federated customers as they moved into higher income brackets.

The new system extended more credit to more people. One customer's revolving statement showed a new balance of $1,921.06 and a minimum due of $591.

In 2000, a year after the switch, Fingerhut lost some $400 million because customers did not pay their bills. An Experian executive described the problem with the models: "If you change the terms of credit. If you change the nature of the business, the degree to which models built on past behaviors will be predictive of what's gonna happen in the future is somewhat up for grabs." Fingerhut's data recorded how its customers paid off fixed coupon books. It said far less about how they would handle an open line of credit.

The final Fingerhut catalog went into the mail at the start of 2002. Its end put up to 6,000 jobs at risk, 4,700 of them in Minnesota. In 2002, businessman Tom Petters bought the company for under $500 million. That was less than a third of what Federated had paid three years earlier.

Bluestem, the 2025 closure and buy now, pay later

The company now operates as Bluestem Group Inc., which also owns the catalog brands Blair and Appleseed's. When Bluestem Brands filed for Chapter 11 in 2020, its direct-to-consumer business spanned seven brands and two million customers. It gave the reason as significant liquidity constraints from high debt service, declining revenues and a weak fourth quarter of 2019. A $300 million stalking-horse bid set the floor for a bankruptcy auction. Bluestem asked to honor all customer programs, credit cards included, and described itself as a niche player serving underserved consumers.

The cuts came in 2025. In February, Bluestem's headquarters job cuts were set to lay off 117 of its 228 employees by April 12. In August it announced the closing of its St. Cloud distribution center, with 118 layoffs before the end of the year. In September it told state officials that 103 employees across various departments would be laid off in mid-November. On October 2, purchases ended. Fingerhut's closure notice says "We can't continue offering this purchasing option." Each account is reported to the credit bureaus as closed with a remaining balance until it is paid in full.

A BNPL loan is a form of interest-free credit paid back over four installments, and the first is usually a down payment. Fingerhut's installment credit, by contrast, came at department store rates. Five BNPL firms originated 180 million loans totaling over $24 billion in 2021, nearly ten times their 2019 volume. Approval rates rose to 73 percent of applicants in 2021, up from 69 percent in 2020. Late fees became more common: 10.5 percent of unique users were charged at least one in 2021, up from 7.8 percent in 2020.

BNPL lenders are also moving users into their own apps, which builds a digital profile of each user's shopping preferences and behavior. The concern there is the harvesting and monetizing of that data. Fingerhut's own databases, from 1974 on, modeled consumers' credit risk and buying habits.

A four-installment loan is closer to the Fingerhut coupon book than to the revolving card that replaced it: in both, the number of payments is fixed. Fingerhut now takes payments on existing balances only.

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