Affirm Receives $100 Million Credit Line

October 26, 2016, Written By Natalie Rutledge

Affirm has procured a $100 million credit line from Morgan Stanley.

Affirm is an alternative to credit cards that allows consumers to pay for major purchases over time. The company, which targets Millennials, uses a proprietary technology that verifies identity and assesses credit risk by using sources beyond the conventional FICO score. This allows them to finance a broader group of consumers.

Max Levchin, PayPal’s co-founder and Affirm’s CEO told CNBC that the company wants to help Millennials afford nicer things.

“We are helping them take an expensive item–that would hit the cash flow too hard–split it into several payments, pay it off, be done,” Levchin said. “A lot of people prefer that to the complexity and unpredictability of carrying a credit card balance.”

While Affirm has partnered with over 750 merchants, such as Makerbot and Casper, to accept Affirm directly, users can also create a “virtual card” to use their account to pay at other stores. This virtual card would work just like a Mastercard.

Unlike a credit card, though, each purchase has its own credit line. There is no open, revolving line of credit as there is with a traditional card. Also, the interest rate is set and is not compounded over an unlimited time period.

Levchin believes this will take away the risk of overspending which so many Millennials seem to fear. A study that analyzed Facebook conversations between Millennials aged 21 to 34 found this group feels credit cards can worsen financial standing, and they prefer paying with cash.

The information contained within this article was accurate as of October 26, 2016. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.

About Natalie Rutledge

Natalie Rutledge majored in Communications at Mississippi State University. She was in sales for a number of businesses and spent nine years working as a communications advisor to various entities. Natalie can be contacted directly at [email protected]
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