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Cash-Strapped Millennials Are Turning to Installment Plans to Pay for T-Shirts and Jeans

Finance apps Afterpay and Affirm approve applicants in seconds and say their algorithms minimize default risk.

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Millennials Spend Just Like Their Parents, But They Have Less Money

Installment plans have helped shoppers afford large purchases since the late 19th century and are still available for pricey items like cars and smartphones. But to delay payment for a T-shirt and a couple pairs of jeans, you needed a credit card. Now several fintech startups are putting smaller purchases on installment, too. 

Earlier this year, Australia’s Afterpay began offering installment plans in the U.S., joining Affirm, a San Francisco startup launched by PayPal co-founder Max Levchin. Square announced its own installments plan in October; so did Swedish payments company Klarna, which has teamed up with H&M to offer services in 14 markets it didn’t name.