Is Affirm the best buy now pay later service in the USA?

By   |   Verified by Yvonne Taylor   |   Updated 12th May 2021

Finty Review Affirm
  • Quickly and easily finance your purchases for three, six or 12 months.
  • Get finance for individual purchase amounts up to $17,500.
  • Interest charges apply unless an Affirm partner retailer offers you a 0% deal.

Are you looking for a way to finance a big-ticket purchase like new furniture or electronics? You could put your credit card away and use Affirm financing instead. This company offers you point-of-sale financing options at some of the world’s leading online and offline retailers.

Affirm issues you with flexible payment plans, ranging up to 12 months. You get to pay your purchase off without using up the limit on your credit card. Affirm financing could be a good way to finance your next shopping spree online. Let’s unpack everything you need to know about how it works.

Affirm

Affirm

Maximum loan amount

$17,500.00

Repayment

3, 6 or 12 months

Late fee

$0.00

Highlights

  • Know exactly what you will owe and when you will be done paying.
  • There are no hidden fees—not even late fees.
  • Download the Affirm app or sign in at affirm.com and make monthly payments.

How does Affirm work?

Max Levchin founded Affirm in 2012, and the company is a leader in the point-of-sale loan market. If you’re thinking about checking out on Amazon with that new IR sauna, why not take it on credit with Affirm instead of putting it on your card?

With Affirm, you get financing for amounts up to $17,500, with your choice of flexible repayment terms. You’ll get favorable interest rates, similar to what you pay with your credit card. Affirm works with select retail partners, and it operates similarly to a credit card facility, but with one major point of difference. Where credit cards charge you compound interest on your debt until it is repaid in full, Affirm tells you upfront exactly how much you need to repay, including a fixed amount of interest.

Affirm offers you flexible repayment options at the checkout. You can take your purchase on three, six, or twelve-month terms to suit your budget. However, Affirm might need you to make a downpayment, which can be anywhere from 10% to 50% of the purchase value.

After accepting the deal, Affirm becomes the creditor. The company settles with the retailer in full, and you are now liable to repay Affirm as per your agreed repayment terms.

Who is Affirm for?

Affirm is for anyone who wants to take their online or offline purchase on credit. You’ll need a good credit rating – probably a score of at least 550 – to apply for Affirm financing. However, if you meet the lending criteria, you get instant approval on your loan and flexible payment terms.

When it comes to point-of-sale loans, Affirm has one of the best offerings, with a large loan facility and payments up to 12 months.

One of the best points of choosing Affirm is your ability to reschedule charges. If you’re sure you’re going to be late with your payment, log into your dashboard, and reschedule your payment date at no extra cost or late fee penalty. However, paying late could affect your credit score.

How do I create an Affirm account?

Accounts can be created in Affirm’s partner stores at the checkout, or at Affirm’s website, or by downloading the iOS or Android app. You’ll need to provide your mobile number, name and address, date of birth and the last four digits of your Social Security number.

Who accepts Affirm?

Affirm works with many point-of-sale retailers. It’s a popular option on Amazon, with almost all merchants offering Affirm payment options at the checkout.

Affirm also works with niche retailers and brands selling their products online. You can get loans for anything from fertility trackers to exercise equipment with Affirm loans.

Well-known brands like Apple Pay integrate with Affirm for instant loans on tech products. There are hundreds of other global retailers working with Affirm; look for it at your next checkout.

Affirm and your credit score

When you sign up for an Affirm point-of-sale loan, you are taking a credit instrument. But Affirm doesn’t perform a hard credit check, only a “soft pull” on your credit information, so simply taking out the loan will not affect your score.

However, if you pay back the loan on time, you’ll experience a boost to your credit score, which helps you get financing from the banks. It’s important to note that the converse is also true. If you don’t pay back your loan on time, miss payments or are late with payments, it will affect your credit score negatively.

Is it better to use Affirm or a credit card?

If you have access to a credit card, it’s the better option if you make full use of the grace period but then repay your bill before incurring any interest charges. However, if you’re like many Americans and prefer to keep the credit card for emergencies, Affirm is a viable alternative.

While your credit card might have a $15,000 limit, your bank or card issuing authority probably doesn’t want to see you have an outstanding balance of more than $5,000 (33% of the limit) at any time. If you go over this ratio, you’ll end up affecting your credit score.

Since Affirm offers loans up to $17,500, it’s the ideal choice for financing a bigger-ticket item as opposed to using your credit card.

However, there are some issues with using Affirm. The company can charge a high interest rate, and if you’re getting an 18% APR on your card, you can expect the rate at Affirm to be similar or higher. However, you get flexible spending limits, with up to 12-months to pay off your purchase.

Some retailers may partner with Affirm to offer a 0% APR on certain purchases.

Pros and cons

Pros

  • Fast access to credit at point-of-sale to pay for your purchase.
  • Works with leading retailers and brands, as well as niche companies.
  • No hard credit check before approval, so your credit score is not affected.
  • Full on-time payments are reported to credit bureaus for many Affirm loans, improving your credit rating.
  • Flexible rescheduling of payments, with no late payment fees.
  • Longer payment plans – up to 12 months – than some other BNPL providers.

Cons

  • High APR similar to credit card interest rates.
  • Late payments are reported to credit bureaus, reducing credit scores.
  • You won’t get approval unless you have a good credit score.
  • Down payments required for most payment plans.

Alternatives to Affirm

A number of buy now pay later services compete with Affirm in the USA. These are the most popular now.

Afterpay. With Afterpay, you get a credit facility for two months. With Affirm, you have options for three, six, and twelve-month payment plans, with some shorter or longer terms also available.

Quadpay. The Quadpay mobile app is a contender to Affirm for point-of-sale purchases. Link your debit or credit card, and Quadpay splits your payments in four, deducting them from your credit card at two-week intervals.

Klarna. The Klarna “Pay in 4” payment plan is another point-of-sale financing option available at leading retailers. You get to take your purchase on credit, with four equal payments paid every two weeks. You make your first payment at the checkout.

Sezzle. Another attractive option for payment plans at checkout. With Sezzle, you get hassle-free loans with no credit check. Down payments are required, and payment terms are spread over six weeks. You get one free reschedule for late payments, but further reschedules cost $5.

FAQs

Does Affirm run a credit check when opening an account?

Yes, Affirm runs a “soft” credit check to confirm your identity when making a purchase. However, Affirm doesn’t run a “hard” check, so there’s no impact on your credit score.

How does Affirm make money?

Affirm makes money charging its clients interest on the loans they take. Affirm collects that interest to fund its business model and make a profit.

What are the options for creating an account?

You have three options:

  • Download the iOS or Android app to your mobile device, and create an account.
  • Choose Affirm as your payment method at checkout, and follow the prompts.
  • Sign up in advance at Affirm’s website.

Is it possible to earn rewards points while spending with Affirm?

No, Affirm doesn’t offer a rewards program.

Can I request a credit limit increase?

No, you can’t increase your credit limit. However, Affirm lets you take as many loans as you qualify for.

What happens if I miss a payment?

Sign in to your account and reschedule your payment ASAP. Late payments can damage your credit score and hurt your prospects of future Affirm loans. Affirm doesn’t charge anything for rescheduling a payment.

How do I close my Affirm account?

You can close your Affirm account at any time by following this step-by-step process.

  • Visit the Affirm website.
  • Click on Help at the top of the home page.
  • Click “See All” under “Manage My Account.”
  • Click “Cancel My Account.”
  • Enter your phone number and email address.