Buy now, pay later company, Affirm, will soon offer a debit card. The new product will work in conjunction with Affirm’s traditional installment loans and allows customers to pay over time in much the same way as a conventional credit card. The card so closely resembles a credit card in use that Affrim is calling it the “anti-credit card.”
Affirm Launches Debit Card
Affirm, one of the leading names in the growing buy now, pay later marketplace, announced its first card product – a debit card – recently. The card seeks to expand the company’s reach beyond online point-of-sale loans to accommodate in-store shopping, providing many of the benefits of a credit card – including making purchases and paying those off later, with interest.
Speaking with CNBC, Affirm CEO and founder, Max Levchin, denied the close comparisons with traditional credit cards, saying that the Affirm debit card is something completely different.
“It should not be called a credit card, for sure, in part because it’s sort of the anti-credit card. I don’t mean to be provocative,” Levchin told CNBC’s Closing Time. “You know exactly what you’re going to pay. You know exactly what the schedule for payment is, and there will be no late fees under any circumstances, so I think it’s sort of the exact opposite in many ways. It does serve the same purpose: You get to pay for things right now or over time.”
Levchin was quick to highlight that the Affirm debit card differs from credit cards in that there are no late fees, no hidden fees, and no compounding interest. It should be noted, however, that many credit cards also lack these fees or charges.
Who Should Consider the Affirm Debit Card?
Who exactly is Affirm targeting with its debit card? Levchin believes Affirm’s primary base is younger consumers – especially those with no credit card experience.
“I do know that our user base, primarily millennials and Gen Zers, love their debit cards. They love to transact with them offline,” he said, “and the purpose of this product was to bring ‘buy now, pay later’ functionality that they’ve really loved online — and really offline as well with us, but have never had in a card — to where they are.”
What Are the Benefits of Buy Now, Pay Later?
One of the most significant benefits of buy now, pay later services is that they typically don’t need credit approval. Because these services conduct a soft pull on your credit report, there is usually no impact to your credit score when applying.
Another benefit of buy now, pay later is the ease of use the services offer. Applying for financing directly within many payment platforms is an excellent, streamlined feature. This perk can take much of the stress out of funding larger purchases.
Related Article: Buy Now, Pay Later: Is It Worth It?