Contrary to the common perception of users paying off balances monthly ("transactors"), the majority—about 60%—are "revolvers" who carry debt. This group is the primary source of profit for card issuers, as they are subject to interest rates now averaging a staggering 23%.

The same banks issuing high-interest credit cards offer substantially cheaper personal lines of credit to customers with identical FICO scores. Despite being a logical tool for consolidating expensive card debt, these products receive almost no marketing, making them largely invisible to consumers.

Technology in finance is a double-edged sword. While it can increase access, it can also be used to gamify trading, encourage impulse spending with 'buy-now-pay-later' schemes, and circumvent traditional consumer protection laws.

Affirm's CEO suggests competitors don't report payment data to credit bureaus as a business strategy. By keeping delinquencies off the 'permanent record,' they can implicitly encourage late payments, from which they profit via fees. Affirm, having no late fees, advocates for full reporting.

A surprisingly large portion of high credit card APRs covers operating expenses, particularly marketing. Issuers like Amex and Capital One spend billions annually on customer acquisition. This spending is passed directly to consumers, as higher marketing budgets correlate with higher chargeable rates.

The financial industry systematically funnels average investors into index funds not just for efficiency, but from a belief that 'mom and pop savers are considered too stupid to handle their own money.' This creates a system where the wealthy receive personalized stock advice and white-glove treatment, while smaller investors get a generic, low-effort solution that limits their potential wealth.

Affirm's CEO argues the core flaw of credit cards is not high APRs, but a business model that profits from consumer mistakes. Lenders are incentivized by compounding interest and late fees, meaning they benefit when customers take longer to pay and stumble.

The difficulty in building an emergency fund isn't just about discipline; it's exacerbated by traditional bank fees that penalize low balances. Unexpected charges can derail progress, making fee-free banking a critical component of financial stability for many.

By eliminating late fees and compounding interest, Affirm removes any financial upside from borrower mistakes. This forces the company's business model to depend solely on successful repayment, demanding superior, transaction-by-transaction underwriting to survive.