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Affirm Card: The BNPL Baby That's Growing Up Like It Has a Cheat Code
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Key Takeaways
Affirm's cash-flow underwriting boosts approvals for younger users with thin credit files.
Affirm Card drives 135% GMV growth as 0% APR offers gain stronger traction.
Affirm captures more discretionary spend, pointing to a long runway for card expansion.
Affirm Holdings, Inc.’s (AFRM - Free Report) Affirm Card continues to emerge as one of its most powerful growth drivers, with management calling it a “favorite child” and highlighting its accelerating penetration. In the first quarter of fiscal 2026, Direct-to-Consumer GMV increased 53% to $3.2 billion and Affirm Card GMV surged 135% to $1.4 billion. A key catalyst was its early success with cash-flow underwriting, a method that evaluates real-time spending and deposit patterns rather than relying solely on traditional credit files.
This approach is particularly effective for younger consumers, millennials and Gen Z, who often avoid revolving credit card debt and therefore generate thin credit histories. Cash-flow data gives Affirm a deeper signal on these users’ ability to repay, enabling more approvals without pushing into riskier credit tiers. Management emphasized that while still in early testing, the method unlocks more opportunities and should support higher volume over time.
The company remains deliberately paced with marketing. Affirm has done no external marketing for the card; growth so far has come primarily from existing users. The team is gradually expanding eligibility to broader credit segments as underwriting confidence improves. Over the long run, Affirm expects the card to be offered to nearly every user in its ecosystem. It added 500,000 cardmembers in the first quarter.
Early behavioral data is encouraging: the card is capturing strong discretionary spend, starting each new cohort at a higher baseline. Affirm is also pushing more 0% APR offers, with 0% GMV on the card jumping 158%. The targets are 10 million active cards and roughly $7,500 in annual discretionary spend per card, which remain firmly in reach.
How Are Other BNPL Providers Faring?
AFRM’s peers like PayPal Holdings Inc. (PYPL - Free Report) and Block, Inc. (XYZ - Free Report) are also working towards increasing their BNPL footprints and capturing more market share.
In the third quarter, PayPal’s total payment volume grew 8% to $458.1 billion. Its active accounts increased 1% during this time to 438 million. PayPal’s transaction revenues gained 6% year over year in the third quarter.
Meanwhile, Block’s BNPL platform’s GMV reached $9.7 billion during the third quarter, a 17% year-over-year jump. It witnessed the BNPL gross profit jump 23% to $299 million. Block’s post-purchase BNPL options are expected to boost Cash App Card figures.
Affirm’s Price Performance, Valuation and Estimates
Shares of Affirm have gained 11.9% year to date, outperforming the broader industry but underperforming the S&P 500 Index.
Affirm’sYTD Price Performance
Image Source: Zacks Investment Research
From a valuation standpoint, Affirm trades at a forward price-to-sales ratio of 5.10X, up from the industry average of 4.79X. AFRM carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Affirm’s fiscal 2026 earnings implies a 566.7% surge year over year, followed by a 57.1% jump next year.
Image: Bigstock
Affirm Card: The BNPL Baby That's Growing Up Like It Has a Cheat Code
Key Takeaways
Affirm Holdings, Inc.’s (AFRM - Free Report) Affirm Card continues to emerge as one of its most powerful growth drivers, with management calling it a “favorite child” and highlighting its accelerating penetration. In the first quarter of fiscal 2026, Direct-to-Consumer GMV increased 53% to $3.2 billion and Affirm Card GMV surged 135% to $1.4 billion. A key catalyst was its early success with cash-flow underwriting, a method that evaluates real-time spending and deposit patterns rather than relying solely on traditional credit files.
This approach is particularly effective for younger consumers, millennials and Gen Z, who often avoid revolving credit card debt and therefore generate thin credit histories. Cash-flow data gives Affirm a deeper signal on these users’ ability to repay, enabling more approvals without pushing into riskier credit tiers. Management emphasized that while still in early testing, the method unlocks more opportunities and should support higher volume over time.
The company remains deliberately paced with marketing. Affirm has done no external marketing for the card; growth so far has come primarily from existing users. The team is gradually expanding eligibility to broader credit segments as underwriting confidence improves. Over the long run, Affirm expects the card to be offered to nearly every user in its ecosystem. It added 500,000 cardmembers in the first quarter.
Early behavioral data is encouraging: the card is capturing strong discretionary spend, starting each new cohort at a higher baseline. Affirm is also pushing more 0% APR offers, with 0% GMV on the card jumping 158%. The targets are 10 million active cards and roughly $7,500 in annual discretionary spend per card, which remain firmly in reach.
How Are Other BNPL Providers Faring?
AFRM’s peers like PayPal Holdings Inc. (PYPL - Free Report) and Block, Inc. (XYZ - Free Report) are also working towards increasing their BNPL footprints and capturing more market share.
In the third quarter, PayPal’s total payment volume grew 8% to $458.1 billion. Its active accounts increased 1% during this time to 438 million. PayPal’s transaction revenues gained 6% year over year in the third quarter.
Meanwhile, Block’s BNPL platform’s GMV reached $9.7 billion during the third quarter, a 17% year-over-year jump. It witnessed the BNPL gross profit jump 23% to $299 million. Block’s post-purchase BNPL options are expected to boost Cash App Card figures.
Affirm’s Price Performance, Valuation and Estimates
Shares of Affirm have gained 11.9% year to date, outperforming the broader industry but underperforming the S&P 500 Index.
Affirm’sYTD Price Performance
From a valuation standpoint, Affirm trades at a forward price-to-sales ratio of 5.10X, up from the industry average of 4.79X. AFRM carries a Value Score of F.
The Zacks Consensus Estimate for Affirm’s fiscal 2026 earnings implies a 566.7% surge year over year, followed by a 57.1% jump next year.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.