CAUTIONARY STATEMENT RELATING TO FORWARD-LOOKING STATEMENTS

     We and our representatives may, from time to time, make
written or verbal forward-looking statements.  Those
statements relate to developments, results, conditions or
other events we expect or anticipate will occur in the
future.  Our Form 10-K, our Annual Report to Shareholders,
any Form 10-Q or Form 8-K filed by us or any other written
or oral statements made by or on behalf of us may also
include forward-looking statements that reflect our then
current views and assumptions with respect to future events
and financial performance.

     We caution investors that any forward-looking
statements made by or on behalf of us are subject to certain
risks and uncertainties that could cause actual results to
differ materially from those projected.  These uncertainties
and other factors include, but are not limited to the
factors listed below (many of which have been discussed in
our prior filings with the Securities and Exchange
Commission).  Although we have attempted to list
comprehensively these important factors, we caution
investors that other factors may in the future prove to be
important in affecting our results of operations and
financial condition.  New factors emerge from time to time
and it is not possible for us to predict all of such
factors, nor can we assess the impact of each such factor on
the business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking
statements.

     We further caution investors not to place undue
reliance on such forward-looking statements as they speak
only of our views as of the date that we made such statement
 . The following list of important factors is not exclusive
and we do not undertake to publicly update or revise any
forward-looking statement to reflect events or circumstances
that occur after the date the statement is made.  The words
"believe," "expect," "anticipate," "intends," "estimate,"
"forecast," "project" and similar expressions identify
forward-looking statements.  Any such forward-looking
statements are qualified by the following which contain
certain of the important factors that could cause actual
results to differ materially from those predicted by the
forward-looking statements:

When we refer to "our company," "we," "our," and "us" in
this discussion, we mean Fingerhut Companies, Inc.

Importance of Fourth Quarter; Fluctuations in Quarterly
Operating Results

     Our business is subject to seasonal variations in
demand that we believe are generally associated with the
direct marketing and retail industries.  Historically, we
have realized a significant portion of our sales and net
earnings during the fourth quarter.  Over the past several
years, we have observed that customers waited until later in
the fourth quarter to order merchandise from our catalogs,
following a trend that has affected the retail industry as a
whole.  Our annual results could be adversely affected if
our sales were to be substantially below normal seasonal
sales during the fourth quarter of any year.  In addition to
seasonal variations, we experience variances in quarterly
results from year to year that result from changes in the
timing of our promotions and the types of customers and
products promoted and, to some extent, variations in dates
of holidays and the timing of quarter ends.

Holding Company Structure; Effective Subordination

     We are a holding company and substantially all of our
consolidated assets are held by our subsidiaries.
Accordingly, cash flow and our ability to service debt are
dependent upon the earnings of such subsidiaries.
Furthermore, our rights, and the rights of our creditors, to
participate in the assets of any subsidiary upon the
subsidiary's liquidation or reorganization will be subject
to the prior claims of such subsidiary's creditors, except
to the extent that we may ourself be a creditor with
recognized claims against the subsidiary, in which case our
claims would still be effectively subordinate to any
security interest in, or mortgages or other liens on, the
assets of such subsidiary and would be subordinate to any
indebtedness of such subsidiary senior to that held by us.
We may borrow up to $250 million under our existing amended
credit facility.  All of the available $250 million under
this credit facility is guaranteed by Fingerhut Corporation
("Fingerhut") and Arizona Mail Order Company, Inc.  In
addition, as of September 25, 1998, we had outstanding $125
million aggregate principal amount of outstanding senior
notes, which are also guaranteed by Fingerhut.

Increases in Postal, Paper and Freight Costs

     We mail our catalogs and ship most of our merchandise
through the United States Postal Service.  In 1998, the
United States Postal Service announced a proposed increase
in mailing rates that will take effect in January 1999.
This increase, as well as additional increases in postal
rates or paper costs could adversely affect our results of
operations if we are unable to offset such increases by
raising selling prices or by implementing more efficient
mailing, delivery and order fulfillment systems.  Increases
in fuel costs could also adversely affect our costs of
incoming and outgoing freight.

Funding and Securitization Considerations

     One of our main sources of liquidity to fund our
operations is asset-backed financing
("securitization") of our subsidiaries' accounts receivable
and credit card loans ("Receivables").  To date, we have
been able to complete securitization transactions on terms
that we believe are favorable.  There can be no assurance,
however, that the asset-backed securities market will
continue to invest in securities backed by assets such as
the Receivables or that the cost of such financings will
remain an attractive source of funding.  In addition, our
ability to securitize the Receivables depends on the
continued favorable legal, regulatory, accounting and tax
environment for securitization transactions.  While we do
not at present foresee any significant problems in any of
these areas, any such adverse change could force us to rely
on other potentially more expensive funding sources.
Increased levels of delinquencies and credit losses on the
securitized Receivables could result in a downgrade or
withdrawal of the ratings on the securities issued under our
existing securitization transactions or cause such securities 
to begin early and/or rapid amortization.  Such result could 
jeopardize the ability of our subsidiaries to complete other 
securitization transactions on acceptable terms, thereby 
decreasing our liquidity and forcing us to rely on other 
funding sources to the extent available.  Our financial 
statements reflect the treatment of securitization transactions 
as sales of the related receivables for accounting purposes 
under Statement of Accounting Standards No. 125, "Accounting for 
Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities.  Any change in such accounting treatment could
have a material effect on our financial statements.

Consumer Spending

     Weak economic conditions or changes in the retail
environment or other economic factors that have an impact on
the level of consumer spending could have a material adverse
impact on us.  General economic factors that are beyond our
control impact our forecasts and actual performance.  These
factors include interest rates, recession, inflation,
deflation, consumer credit availability, consumer debt
levels, tax rates and policy, unemployment trends and other
matters that affect disposable consumer income and influence
consumer spending.  Increasing volatility in financial
markets may cause these factors to change with a greater
degree of frequency and magnitude.  Adverse changes in these
economic conditions may restrict consumer spending.  There
can be no assurance that weak economic conditions or changes
in the retail environment or other economic factors that
have an impact on the level of consumer spending would not
have a material adverse impact on us.  In addition, our
business depends on customer response to our solicitations
and marketing programs.  A material decrease in responses to
these solicitations and marketing programs would have a
significant adverse impact on our profitability.

Credit Risks

     We are subject to all of the risks associated with
unsecured credit transactions, including (1) the risk of
increasing delinquencies and credit losses during economic
downturns, (2) the risk that an increasing number of
customers will default on the payment of their outstanding
balances or seek protection under bankruptcy laws, resulting
in accounts being charged off as uncollectible, (3) the risk
of fraud and (4) in the case of revolving credit accounts,
the risk that increases in discretionary repayment of
account balances by customers will result in diminished
finance charges or other income.  Also, general economic
factors, such as the rate of inflation, unemployment levels
and interest rates may affect moderate income consumers (our
target market customers) more severely than other market
segments.  Any material increases in delinquencies and
losses above managements expectations would have a material
adverse impact on our results of operations and financial
condition.

Interest Rate Risk

     Fingerhut National Bank's closed-end credit card loans
and Fingerhut's remaining closed-end installment sales
contracts are fixed-priced, fixed-term contracts.  Fingerhut
National Bank's revolving credit card accounts currently
have variable finance charges rates ranging from the prime
interest rate plus 16.4 percent to the prime interest rate
plus 23.4 percent.  Fluctuations in interest rates may
adversely affect our cost of funds.

Regulatory Matters

     Our business is subject to regulation by a variety of
state and federal laws and regulations related to
advertising, offering and extending credit, charging and
collecting state sales/use taxes and product safety.  Our
practices in certain of these areas are subject to periodic
inquiries and proceedings by various regulatory agencies.
While we believe that we are materially complying with all
such laws and regulations, if we are found not to be
complying with any such laws and regulations, we could
become subject to cease and desist orders, injunctive
proceedings, obligations to collect additional sales and use
taxes, obligations for prior uncollected sales and use
taxes, civil fines and other penalties.  The occurrence of
any of the foregoing could adversely affect our results of
operations and financial condition.

Until  January  1997,  Fingerhut  extended  credit  for  its
customers'  purchases.  Fingerhut relied  on  the  Minnesota
"time-price"   doctrine  in  establishing   and   collecting
installment payments on products sold in many states.  Under
this  doctrine,  the difference between the time  price  and
cash  price  for the same goods is not treated  as  interest
subject to regulation under laws governing the extension  of
credit.   Certain  individuals  who  purchased  goods   from
Fingerhut  filed suit challenging the applicability  of  the
time-price  doctrine  to  Fingerhut's  business.   Fingerhut
filed  a  motion  for  summary judgment on  the  plaintiffs'
claims, which the court denied in part and granted in  part.
A  pre-trial  settlement conference was held on October  19,
1998.   See  "Part II, Item 1--Legal Items" in our Quarterly
Report  on  Form  10-Q for the quarter ended  September  25,
1998.

     The credit operations of Fingerhut National Bank
generate additional revenue from fees related to extending
credit.  Fingerhut National Bank's ability to extend credit
depends on many factors including compliance with numerous
federal and state banking and consumer protection laws, any
of which may change from time to time.   Such laws, as well
as any new laws or rulings that may be adopted, may
adversely affect Fingerhut National Bank's ability to
collect on account balances or maintain previous levels of
periodic rate finance charges and other fees and charges
with respect to the accounts.  Any failure by us to comply
with these legal requirements also could adversely affect
our ability to collect the full amount of the account
balances.  Fingerhut National Bank is also subject to
regulation by the Federal Reserve Board, the Federal Deposit
Insurance Corporation and the Office of the Comptroller of
the Currency.  Such regulations include limitations on the
extent to which Fingerhut National Bank can finance or
otherwise supply funds to its affiliates through dividends,
loans or otherwise.  In addition, changes in credit card
use, payment patterns and default rates may result from a
variety of economic, legal, social and other factors that we
cannot control or predict with certainty.  Changes that
adversely impact Fingerhut National Bank's ability to extend
credit and collect payments could negatively affect our
results.  Changes in federal and state bankruptcy and debtor
relief laws also could adversely affect us if such changes
result in, among other things, additional administrative
expenses and accounts being written off as uncollectible.

Foreign Suppliers

     Fingerhut purchases a significant portion
(approximately 46% in 1997) of its merchandise from foreign
suppliers.  Although substantially all of our foreign
purchases are denominated in U.S. dollars, we are subject to
the risks of doing business abroad, including trade
restrictions, tariffs, increases in import duties, decreases
in quotas, adverse fluctuations in currency exchange rates,
increased customs regulations and political turmoil.  The
occurrence of any of these risks could adversely affect our
earnings.

Competition

     The direct marketing industry includes a wide variety
of specialty and general merchandise retailers and is both
highly fragmented and highly competitive.  We sell our
products to customers in all states of the United States and
competes in the purchase and sale of merchandise with all
retailers, including general and specialty catalog
marketers, television shopping marketers, retail department
stores, discount department stores and variety stores, many
of which are national chains.  The loss of any significant
portion of our market share to other retailers could
adversely affect our earnings.

OTHER FACTORS

     Other factors that could cause actual results to differ
materially from those predicted include:  changes in the
availability or cost of capital, our inability, or the
inability of vendors and other third parties with which we
conduct business, to achieve year 2000 readiness in a timely
and cost-effective manner, labor strikes or other work
interruptions, the impact of excess retail capacity in our
markets, material acquisitions or dispositions, the success
or failure of significant new business ventures, adverse
results in material litigation, natural disasters, the
outbreak of war or other significant national or
international events.