on Affirm secure website
A new virtual credit card has been launched, and it aims to take the place of the traditional credit card. The Affirm app loans you money so you can make online purchases and allows you to pay it back over the course of several months.
You’ll still have to pay interest, but your rates won’t ever be higher than what you see upfront. Plus, there are no hidden fees. But before you toss your credit cards in the trash, read on to learn more about what Affirm offers and whether it's right for you.
Affirm is a lending app that was created by Yelp co-founder Max Levchin and PayPal. It allows you to make purchases through the app and pay back over time on your terms. The company, which began back in 2012, created the app to act as a virtual credit card so its customers could use it as a line of credit with no strings attached when making online purchases. The app gives you a virtual credit card with a card number, an expiration date, and a security code. When you’re ready to make your purchase online, Affirm will give you a choice of repayment plan options with a flat interest rate up front.
From 10 to 30 percent depending on your eligibility
You can pick from a 3, 6, or 12 months
The app always tells you how much money you will pay up front before you commit to a payment plan. You can use it to get your purchase right away and then split your payments up over time. After selecting your purchase, the app will show you your approved loan amount, the total interest you’ll pay over time, and the number of months that you have to pay all before you sign up.
Jack Chou, the app’s head of product, feels that the app is a better alternative to credit cards. He stated that the app is more aligned with consumer interest and that credit is a fundamentally broken process. Affirm argues that there is a simple way to extend money to people without running the risk of acquiring a large amount of debt.
You can download the app to your iOS or Android device.
The app promises no hidden fees, mounting interest payments, and penalties. They will also send you reminders when your payments are due, so you never miss one.
After downloading the app, you’ll need to create an account by providing proof of identity. Your credit is only extended for the item you want to buy, and the company will determine your qualifications based on how likely you are to pay them back.
So if you have good credit, you’ll likely be offered a bigger loan (up to $10,000). The company holds the right to deny loans if they think that you have excessive borrowing behavior, which is often used to prevent people from using it as a high-limit credit card.
Then, you’ll pay Affirm back over 3, 6, or 12 months depending on which option you choose. Affirm uses loans made by a Member FDIC New Jersey chartered bank called Cross River Bank. You can use the app to manage your account, make payments on your investments, and make online purchases just about anywhere.
To use the app, you’ll first enter your purchase amount and where you are doing your shopping. They will give you Affirm virtual credit card to use and you’ll need to use it to complete your purchase. Your available interest rates and terms are shown during checkout, and you’ll need to submit a down payment to finalize your order. Purchases under $100 don’t offer good payback options, so this service is best for more substantial purchases. After you submit your order, the product will ship as it normally would.
The company promises that you’ll never owe more than what you see when you make your purchase. Also, if you pay early, you’ll save on interest. Affirm makes money by cutting out participating merchants and offering a flat interest rate.
Affrim Credit let people spend their money for online purchases, as easy as "push, read, confirm and enjoy". Check out cons and pros of using Affirm credit.
AFFIRM Credit PROS
AFFIRM Credit CONS
Affirm is an excellent app to use for someone looking to make a big online purchase and cannot afford to pay it all at once. The app doesn’t work well for purchases under $100. The most prominent benefit is that you get to choose your repayment plan and your rate will never increase from the price you agreed upon. However, the Affirm virtual credit card does not earn you revolving credit, which won’t help you built a better FICO score even if you make payments on time.
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