SAN JOSE, Calif. – Affirm, the fintech startup in 2013, through its Affirm app offers small loans for every holiday spending from your plane tickets to Louis Vuitton bags and designer jeans.
During the holiday shopping season, it can often be tough on our wallet and savings. However, there are countless of tricks that one can utilize to save as much money and maximize credit options without having a credit card. It all can be possible with applications such as PayPal and Affirm.
Affirm was launched in 2013 by Max Levchyn, the co-founder of PayPal. Ryan Metcalf, the head of international expansion and the chief of staff of Affirm, told International Business Times that the team is working with about 1,200 retailers within the country. That means they have issued a total of one billion dollars of loans just in 2017.
Metcalf added that they were able to grant approximately 126 percent more people compared to the industry averages. A huge portion of the people approved for loans mostly have no credit access.
Some having access to credit are also being mispriced within the market because of their outdated Fair Isaac Corporation (FICO) score. He also stated that there is about one in ten Americans that has unscorable credit report. From the American population this year, that would be around 30 million citizens.
From the data of the FICO, it showed that a lot of Americans have the same problems. There is about 20 percent of the population with credit cards regarded as “subprime” because of their 600 or much lower FICO score.
While it is usually the basis, a lot of experts are saying that FICO scores seem to be inaccurate and outdated. Urban Institute, the nonprofit think tank, believes that the current FICO scores are obsolete, which are based on the models that were established back in the 1990s.
However, up to this day, FICO scores still play a massive role in identifying credit rates.
The loans being granted by the startup company through its Affirm app are offered through their partnership with the New Jersey Cross River Bank. The loans usually vary from 10 up to 30 percent of interest. However, there are also several merchants that sell various products from coffee beans to furniture without any interest. Offers that have zero interest include jewelry at Valliani Jewelers, SuperJeweler, and Diamond Nexus.
Even for people who have their credit cards to use for this holiday shopping season, managing the budget can still be a little tricky. But, with the transparency feature of the Affirm app, the interest is explicitly stated.
On the other hand, for those who don’t have credit cards of their own or those who have inflated interest rates, using fintech apps like Affirm app can make everything cheaper.
According to Metcalf, using Affirm, they will tell you openly how much the total cost will be, both the interest percentage and the full dollar amount. It is a better feature than that of the credit cards where you won’t have any clue how much something would cost after a period. Those hidden credit card fees are also one of the reasons it’s wiser to use fintech apps like Affirm app.