Consumers Aren't Averse to Debt and Credit – They're Averse to Uncertainty

New Research from Affirm Explores Nuances of Consumers' Relationship with Debt and Credit, Impact of Uncertainty

SAN FRANCISCO – December 14, 2016 – Affirm, Inc., the company started by PayPal co-founder Max Levchin to give consumers honest financial products, today announced the results of its research into some of the nuances surrounding consumers' (especially millennials) relationship with debt and credit.

Drawing upon a survey of 1,089 U.S. individuals between the ages of 22-44 years old, the study reveals that while a large percentage of consumers worry about the mismanagement of credit cards, they are simultaneously open to a healthy amount of debt. Consumers recognize the necessity of credit, but have real concerns about its uncertain terms.

Key findings include:

  • 65 percent of respondents have an actual fear of debt
    • Almost a third (32 percent) are fearful because they don't know how long it would take to pay off
  • Consumers think of their spending in defined time increments:
    • 93 percent plan their spending weekly, twice monthly or monthly
    • 42 percent of millennials (ages 22 – 34) plan their spending on a weekly basis
    • Only 5 percent said they don't plan their spending at all
  • Nearly 3 out of 4 (72 percent) respondents who have carried a credit card balance have worried about how much their purchases would end up costing in total (including interest)
  • 46 percent of respondents who have carried a credit card balance enjoyed some purchases less due to carrying that balance
  • 87 percent of respondents expressed interest in a simple way to pay for large purchases over time that was not a credit card
    • 68 percent of these respondents cited "knowing exactly how much I'll owe and when, including interest," as the most appealing element of a simple credit card alternative

"This research illustrates just how much of an impact uncertainty can have on consumers and their buying decisions," said Affirm Insights & Credit Analyst Ethan Monreal-Jackson. "Consumers are hungry for transparency and credit card alternatives that would allow them to responsibly spend. At Affirm, we're proud to bring honesty to consumer credit, providing consumers the flexibility they need to buy now and pay later without any fees, compounding interest or other surprises."

For access to the full survey summary, click here.

About Affirm

Affirm was founded with a goal to create honest financial products and services that empower consumers and improve lives. Our goal is to revolutionize the banking industry to be more accountable and accessible to consumers. Today, Affirm provides shoppers an alternative to traditional credit cards at the point of sale, giving them the flexibility to buy now and make simple monthly payments for their purchases. Unlike payment options that have compounding interest and unexpected costs, Affirm shows customers upfront exactly what they’ll pay each month — with no hidden fees and no surprises. Affirm partners with over 1,200 merchants, including travel retailers like Expedia, Orbitz, CheapAir and Suiteness, giving shoppers the option to pay with Affirm at checkout.

Media contact

Mikey Collard - Method Communications
mikey@methodcommunications.com
(801) 461-9752