Pros and Cons of Using Affirm for Retail Financing

Pros and Cons of Using Affirm for Retail Financing

I recently used Affirm to pay for a ThredUP purchase. Honestly, I’d kind of forgotten about this financing option. I had used it awhile back then didn’t have a reason to before now. Thinking it over, I see some pros and cons to Affirm for retail financing. However, overall, I’m happy with it.

What is Affirm?

Affirm is a payment option offered through a variety of different retailers. If your retailer offers it, and you qualify, then you break your large payment into several smaller payments.

For example, I just made a huge ThredUP purchase of over $300. The app offered me the option to pay with Affirm. It allowed me to break that payment up into three smaller monthly payments of about $100 each. There are no fees or interest. Therefore, you don’t pay anything extra for this financing option.

Likewise, when I bought my Purple bed awhile back, I used Affirm. I can’t recall if I had a 6-month or 9-month payment plan. Either way, it worked out so that I paid the bed off in less than a year at no extra charge.

Benefits of Affirm for Retail Financing

When I bought my Purple bed, Affirm was really a lifesaver for me. I needed a new bed. Moreover, I didn’t want to skimp and get a cheap bed. Some things are fine to get cheap; for a bed, I need good quality. I couldn’t afford to buy a good bed outright. Therefore, Affirm allowed me to get the bed I wanted. Then I could pay it off in manageable installments.

I loved this option because:

  • It’s nice to get what you need now and pay later.
  • The payments were affordable each month.
  • The payment plan wasn’t so extended that I get locked in for years. (Unlike with a car loan, for example.)
  • I didn’t have to pay any interest or fees. In contrast, I would have paid more if I’d used a credit card.

All in all, I was super thankful that Affirm was a payment financing option.

Drawbacks of Using Affirm

It doesn’t sound like there are any drawbacks, right? However, with my more recent ThredUP purchase, I did notice a few.

First of all, I actually have the money to make the payment on this right away. Therefore, I could have put it all on a rewards credit card instead. If I had, then I would have earned cash back. So I actually lost money by using Affirm instead. (That’s assuming I would have paid the credit card off immediately so as not to accrue any fees.)

Moreover, by choosing monthly payments, I’m taking $100 out off my monthly budget for three months. If I’d thought, “I’m taking $300 out of this month’s budget,” then I might have scaled back my purchase. So I think I spent more on ThredUP just because I could.

Additionally, knowing that this is such an easy payment option has made me want to shop more. It’s stoked that retail consumption urge that I usually can ignore. So, overall, using Affirm in this situation wasn’t great.

Summary: Is Affirm a Good Payment Plan Option?

My conclusion is that Affirm is a great retail financing option in some instances. If you need to make a huge purchase that you can’t pay for outright, then it’s great. You don’t pay any extra fees. Yet, you get what you need when you need it. My new bed was the perfect example. Baby furniture would be another great example. However, for myself anyway, it doesn’t make sense to use Affirm on random unnecessary purchases. It simply makes it too easy to spend more money than I would if I were paying for everything outright.

Do you use Affirm? What has your experience been like?

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