A group of fintech firms are changing the way consumers borrow

JUST UNDER $1.1trn of revolving consumer debt—bills racked up on credit cards—was outstanding in America at the end of August. It is a dangerous type of debt. High interest rates and low minimum repayments mean balances can quickly balloon. But a group of fintech firms are growing fast by offering consumers an alternative.Affirm, based in San Francisco, was founded in 2012 by Max Levchin, a serial entrepreneur who co-founded PayPal. Rather than offer a line of credit to be used at will, like a credit card, it gives loans of up to $15,000 for specific purchases, to be repaid in pre-agreed instalments. When a shopper makes an online purchase with one of its retail partners, for example Peloton, a seller of fancy exercise bikes, Affirm appears as a payment option at checkout. It does a roaring trade in financing for engagement rings and laptops.