Affirm Wants to Extend Tiny Loans for Individual Purchases

This week, I’ve shared stories about mobile-only banks, in-app credit cards, and tiny house compromises. If you were to combine the major themes from each of these stories, you might get something like this:

Lending startup Affirm, founded by PayPal and Yelp co-founder Max Levchin, is out to destroy the credit card, or at the very least make a noticeable dent in its utter ubiquity. The company, which began in 2012 by offering simple and transparent loans for web purchases, is today launching a mobile app to the public that acts as a virtual credit card, so it can be used as a line of credit with no strings attached for pretty much any online purchase.

That’s from The Verge, which goes on to explain that this line of credit is given out per purchase. Or, as Affirm puts it:

With Affirm, you can split almost any online purchase into easy monthly payments.

We really are trying to make everything smaller, aren’t we. Homes, lines of credit… okay, that’s just two things, but you get the point.

On the one hand, only accessing credit when you need to buy a specific item could benefit people who are in the habit of using their credit card as a security blanket. (Or swiping with credit and then hiding under the blanket so they don’t know how much they owe.)

On the other hand, Affirm could make it really easy to buy just one more thing.

There’s also this, from the Affirm FAQ:

Affirm loans vary between 10% and 30% APR simple interest (0% APR is offered at select merchants).

THIRTY PERCENT INTEREST.

What do you think? Would you sign up for an app like this? It seems worse than a credit card in nearly all aspects, including the fact that you don’t get any rewards.

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