Max Levchin’s lending company, Affirm, wants to help you afford those holiday threads you’ve been eyeing.
Affirm first announced its virtual card at Money 20/20 in November, but this is the first time the card has been released to the public.
The company is launching the first version of its online-only credit card through a partnership with fashion brand BCBG. When shoppers go to check out on BCBG’s site, they’ll be presented with a bevy of payment options, including an Affirm credit card.
Clicking on Affirm will launch a new tab where shoppers can fill out a form with their birthday, social security number, mailing address, and email. The service will then determine an appropriate APR based on credit history and will ask them to choose a repayment plan for three, six, or 12 months. Unlike most credit cards, Affirm shows shoppers exactly how much interest they’ll pay over the course of the loan. The company also doesn’t charge late fees. Once the shopper is approved, Affirm will issue a one-time use credit card number that can only be used at that merchant and for the exact amount of the purchase.
Prior to today’s rollout, Affirm provided a very similar service for online retailers: consumer loans. Roughly 450 online merchants offer Affirm as a way to pay for goods. The main difference between the virtual card and Affirm’s checkout loans is a matter of integration. Merchants who want to offer on-demand financing within their shopping cart can just add Affirm’s virtual card as a payment option, rather than coding it into the user experience.
Affirm is one of several startups — including Earnest and Lending Club — that are interested in revamping lending. The technology is aimed at delivering loan decisions in minutes rather than days, using an applicant’s financial data along with social data and other lifestyle cues that indicate spending behavior.
While the technology is compelling, these companies may still have difficulty getting millennials on board. A Bankrate study from earlier this year shows that most 18-29 year olds don’t have a credit card. In general, credit card ownership has declined since the U.S. financial recession.
Affirm wants to combat this trend by providing loan options right at the moment of purchase, along with a transparent APR rate. But millennials may still be wary of taking on debt, even if it means they won’t be building a traditional credit history.