Make a purchase on a payment plan with Affirm
- jul
- 18
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Maybe you're shopping online looking at a sale on a new pair of Warby Parker glasses or a shiny Movado watch. Problem is, you know you have some expenses coming up - a student loan payment, rent, and a credit card bill bolstered by summer wedding season travel and unexpected baggage fees. You know you can make the purchase by next month but by then, the sale could be over. But then you notice the "pay with Affirm" option that's allowing you to purchase the item now with an installment plan over 6 months. Is this legit?
What is Affirm
Affirm is an alternative option to credit cards and personal loans that offers quick financing with no hidden fees. Ideally, a shopper could put a purchase on a card with a 0% introductory APR offer. But when that's not available, Affirm is a good option. If the retailer is within Affirm's network, then Affirm will instantly offer payment plans for that retailer's merchandise. Interest rates on these payment plans typically range from 10 to 30 percent and payment periods can range from 3 to 12 months. What differentiates Affirm is that there is no pre-payment penalty. So if you find yourself with a little more cash than you had expected, you can pay off the rest of your payment scheduled, and you won't be charged a fee.
How it works
Affirm performs a soft credit check, which does not affect your credit score. This determines your risk as an effective borrower. If you're approved, then Affirm will offer you payment plans at checkout. The payment plans are transparent because they include everything you owe, even interest. After choosing one of the payment options, the rest of your purchase experience is the same - the retailer sends you the item and Affirm pays the retailer. In subsequent months, Affirm will send you payment reminders.
Should you use Affirm
If you have a steady stream of income and just need a little help to buy the occasional necessity (like a pair of glasses), Affirm would be a good option. On the other hand, a brand new couch that isn't necessary could put undue pressure on your future months' finances. We always recommend budgeting out your finances and there are several apps that could help you with that.
Our favorite card
Chase Sapphire Preferred® Card
With its sign-up bonus having just jumped to 60,000 points when you spend $4,000 in the first three months, now's the time to add the Chase Sapphire Preferred® Card to your wallet. Even better, future travel and dining purchases earn 2x points per dollar spent and it includes valuable travel benefits like primary car rental insurance. All of these extras make its $95 annual fee easy to justify.