Investors should be paying close attention to Affirm Holdings (AFRM) as the buy now, pay later (BNPL) trend continues to accelerate across the U.S. economy.
Several powerful forces are converging in Affirm’s favor — from rising consumer debt to shifting payment preferences and growing Wall Street support.
Rising Consumer Debt Is Changing Behavior
Americans are taking on more debt, and that trend is reshaping how consumers pay.
According to CNN, credit card balances topped $1.2 trillion, rising 7.3% year over year. While that marks the smallest annual increase since 2021, household debt levels remain elevated as consumers contend with higher prices, strong spending, and the continued growth of e-commerce.
As borrowing costs stay high, many consumers are searching for alternatives — and that’s where BNPL comes in.
Buy Now, Pay Later Adoption Keeps Accelerating
BNPL usage continues to grow at an impressive pace.
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U.S. consumers spent roughly $20 billion using BNPL during the November–December period alone
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That figure represents nearly 10% year-over-year growth
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MarketWatch reported BNPL spending between November 1 and December 31 rose 9.8% year over year
Zooming out, the long-term opportunity becomes even more compelling. Global BNPL transaction volume is projected to reach $560 billion to more than $900 billion by 2030, while the U.S. market alone could approach $200 billion by 2026.
Wall Street Turns Bullish on AFRM
Analysts are taking notice.
Needham recently upgraded Affirm to a Buy, issuing a $100 price target. The firm highlighted that Affirm has submitted an application to establish Affirm Bank, a proposed Nevada-chartered industrial loan company, as reported by CNBC.
If approved, this move could be transformative. Operating a banking entity may:
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Lower funding costs
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Improve margins
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Reduce reliance on third-party capital markets
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Enhance regulatory flexibility
JMP analysts also upgraded AFRM to market perform, calling the company a “long-term secular winner”, largely at the expense of the traditional credit card industry.
BNPL Is a Direct Threat to Credit Cards
BNPL platforms like Affirm pose a growing challenge to credit card issuers.
First, BNPL often offers interest-free payment options, particularly attractive for online purchases. That draws consumers away from credit cards and cuts into fee income for card issuers.
Second, adoption is strongest among younger consumers. Studies show:
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51%–59% of Gen Z use BNPL
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48%–58% of Millennials use BNPL
For many in these demographics, BNPL has become more common than credit cards.
Third, a 2025 Morgan Stanley report noted that more than a quarter of U.S. consumers have used BNPL, with BNPL financing 6% of e-commerce sales in 2024, up from just 2% in 2020. Importantly, consumers are increasingly using BNPL for everyday purchases like clothing and groceries — not just large-ticket items.
Bottom Line
Affirm sits at the intersection of rising consumer debt, changing payment habits, and a powerful secular shift toward BNPL financing. With accelerating adoption, improving fundamentals, and growing analyst support, AFRM remains a stock traders should continue to monitor closely.
As BNPL reshapes consumer finance, Affirm’s role in that evolution could remain a key driver of long-term opportunity.
About the Analyst
Ian Cooper is an experienced trader who combines technical, fundamental, and news-driven analysis to help individual investors navigate changing market conditions.
Ian Cooper’s Premium Options Strategies