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Shopping online has never been more convenient. With a click of a button, you can spend money and order anything you want, but now financing your purchases is also getting easier. Affirm, a buy now, pay later (BNPL) service, is already available in stores like Walmart, Target and Lowe’s, in addition to online retailers such as Amazon and eBay.
Now the company has teamed up with J.P. Morgan. According to a press release, J.P. Morgan customers will now have the option to pay for their items with loans.
“The demand for diverse payment options, flexibility, and seamless transactions from both merchants and their customers is at an all-time high,” Michael Lozanoff, global head of merchant services at J.P. Morgan Payments, said in the release.
While Affirm can make it easier for people to shop, it can also help consumers rack up more debt.
You can use Affirm to buy everything from groceries to baby items to apparel.
With Affirm, payments are spread out over different term options, and interest rates vary from 0% to 36%. Per the press release, loan terms range from 30 days to 60 months on purchases from $35 to $30,000. There are no late or hidden fees.
However, a borrower’s credit could be impacted if their loan is delinquent.
The partnership between Affirm and J.P. Morgan might make shopping effortless for more consumers, but it also could provide some insight into where the economy stands.
“It shows that people are still spending, but they’re more cautious about how they spend,” said Danny Ray, founder of PinnacleQuote. “Instead of swiping a credit card, many are looking for ways to break up payments without interest upfront. This makes it feel easier and more affordable in the moment.”
These services allow you to buy whatever you want and pay later, but that can be dangerous. “That’s where the trap is,” Ray said.
With BNPL services, the debt can add up. “Services like Affirm give folks a sense of control, but over time, it can quietly stack up,” he explained. “For example, someone might use Affirm for a $300 purchase today, then do it again next week for $150, and before they know it, they’ve got multiple payments piling up.”
This could ultimately impact your credit if you don’t pay on time.
Having a monthly budget keeps your expenses on track and sticking to it gives you the “freedom” to live within your means and not go into debt or pay interest, according to Rachel Cruze.
The finance guru wrote a blog post explaining why budgeting matters and how it avoids “sneaky” BNPL services.
She explained that these services can trick people into thinking debt is okay. She also noted that the monthly interest rates are incredibly high, more so than those on credit cards. Plus, she said, customers have said that if you return an item, getting a refund is a “nightmare” and you won’t get back any of the interest you paid.
The idea of buying now and paying later is alluring, but it’s not smart. “It opens the door for consumers to stretch beyond their means without realizing the long-term cost,” Ray explained.
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