Eyeing That Sweater? It’s Yours in Four Easy Payments

Eyeing That Sweater? It’s Yours in Four Easy Payments

September 29, 2019 Off By administrator

Sean Gauthier wouldn’t think of using credit cards to buy sneakers.

“I try to save them for an emergency situation,” said

Mr. Gauthier,

a 38-year-old nightclub manager in New London, Conn. “If I start online shopping with my credit card, I’ll start getting nutty.”

But recently, while browsing a $140 pair of white, pink and green Nikes on the app of footwear retailer StockX, he tapped on an offer from financial-technology upstart Affirm Inc. that let him buy the shoes right away and pay for them over six months. He could have bought the colorful kicks outright, but Mr. Gauthier, who has used Affirm several times, said the $5 the company charged him in total interest was a small price for flexibility to pay over time.

Gone are the days when special financing plans were mostly reserved for big-ticket purchases like TVs and refrigerators. Now, sweaters, makeup or other everyday items can be paid for in installments with loans or other payment plans offered at checkout with thousands of merchants in the U.S., including


Urban Outfitters

and, soon,




credit-card users can also sign up for these plans.


Would you choose an installment plan over a credit card? Why or why not? Join the conversation below.

Merchants and lenders are tapping into the financial challenges many U.S. families are facing. Despite signs of a strong economy, like low unemployment, consumers are increasingly relying on borrowing to fund their daily lives. U.S. consumer debt is higher than ever, as cars, college, housing and medical care grow more expensive but incomes stay largely stagnant.

The payment plans often resonate with young adults who are wary of carrying credit-card balances after watching their parents struggle with debt during the last recession. Financial technology companies such as Affirm,

Afterpay Touch Group


PayPal Holdings

dove into these payment plans after that period, when banks pulled back on consumer lending.

Growth is booming. Affirm’s point-of-sale loans doubled to about $2 billion last year and are expected to at least double again this year, Chief Executive

Max Levchin


Reliable, industrywide statistics about the size of this market are hard to come by, and it is tiny compared with the roughly $450 billion of spending limits on new U.S. credit cards that


PLC says were issued last year.

But more than half of merchants surveyed this year by…

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