The two-letter word helping this lender buck the delinquency storm

Americans are increasingly falling behind on their credit card bills and car loans as years of high inflation take their toll.

Americans are increasingly falling behind on their credit card bills and car loans as years of high inflation take their toll. This spike in delinquencies is raising fears about the Buy Now, Pay Later boom. Critics worry these increasingly popular short-term lenders are allowing shoppers to pile on even more debt — at exactly the wrong time. Yet Affirm, one of the leading BNPL companies, has revealed a surprising trend: Its delinquencies are stable even as signs of financial stress flash elsewhere. “We’re not seeing evidence of increased delinquencies in our business. But that’s not an accident,” Max Levchin, Affirm’s CEO and a co-founder of PayPal, told CNN in a recent interview. Levchin credits a willingness to say a two-letter word, one that’s not exactly associated with the surging BNPL industry, N-O. “As unpleasant as it is for both parties – we hate saying no, and consumers don’t like hearing no, but we will decline a loan application if we think the consumer cannot pay us back,” the Affirm CEO said. “It’s not that we are better at knowing something secret about consumers. It’s that we are honest when we tell them, ‘Hey, we don’t think you should borrow right now.’”