‘You Get Screwed by Those People’: Ramsey Torches Affirm the Morning After Its Record $14.4 Billion Quarter
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On the Nov. 6 episode of The Ramsey Show, Dave Ramsey gave a 25-year-old stay-at-home mom a one-line review of buy now, pay later (BNPL) lenders: “You get screwed by those people.” The caller, Janelle, said she had roughly $200 on Affirm (NASDAQ:AFRM | AFRM Price Prediction). Her family was carrying about $40,000 in debt, and she wanted to know how to stop.
Vivian, an previous caller, is a single mom of two in Austin. She makes $50,000 a year and owes $19,600 on a car with a $351 monthly payment. She called Afterpay “my best friend when it comes to clothes.” Ramsey answered: “Mathematically, you can’t afford to buy the clothing that you have to put on Afterpay.”
Split payments break a purchase into small bills that hit the same paycheck as the car note. Each one looks harmless until they all come due together.
Affirm Posted a Record Quarter the Night Before
The evening before, Affirm reported fiscal first-quarter gross merchandise volume (the total value of purchases it financed) of $14.4 billion, up 34%. Active cardholders rose 112% to 6.0 million. The CEO, Max Levchin, wrote about “scaling our network to $100 billion and beyond.”
Investors were less impressed. GAAP EPS of $0.47 missed the $0.861 consensus. Part of the miss came from warrant expense tied to two enterprise partners.
Credit also slipped. Delinquencies of 30 days or more (excluding Peloton (NASDAQ:PTON)) rose to 2.9%, and a Barron’s headline blamed late payments for the stock’s decline. Shares traded near $68 Friday afternoon, down about 9% for the week. Ramsey’s comments had nothing to do with the drop.
Ramsey Is Right, and Affirm’s Revenue Proves It
For callers like Janelle and Vivian, Ramsey’s verdict is correct. Affirm’s income statement shows why. Interest income was $658.1 million, up 45%. That made it the largest line in the quarter’s $1.3 billion of revenue.
Management told analysts the Affirm Card “has historically run north of 80% interest-bearing loans.” In other words, the fastest-growing product is the one most likely to charge interest. Three weeks previous, Ramsey had called Affirm “a payday lender of T-shirts.”
Affirm’s offers range from 0% APR to 10% to 36%. The table below shows what that range means on an example $1,000 purchase.
| Plan | Payment | Total Interest |
|---|---|---|
| Pay in 4 at 0% | Four payments of $250 | $0 |
| 12 months at 10% APR | $88 a month | $55 |
| 12 months at 36% APR | $100 a month | $206 |
At 36%, the borrower pays about 21% of the sticker price in interest. That is the cost of a jacket on top of the jacket.
Missed payments now reach bureaus like TransUnion (NYSE:TRU). Affirm reports all of its pay-over-time loans, including Pay in 4, to Experian since April 2025 and TransUnion since May 2025. A missed installment can follow you to your next car loan application.
The Consumer Financial Protection Bureau found that BNPL borrowers with traditional credit accounts were 11 percentage points more likely than non-users to have a 30-day delinquency. They also had less savings. The study couldn’t say which caused which, but those borrowers look a lot like Ramsey’s callers.
One Question Decides Whether Split-Pay Costs You
What matters most is whether the money is already in your checking account when you click the button.
If it is, a 0% Pay in 4 plan costs nothing. The cash sits in savings a few extra weeks, and each installment comes out of money you already set aside. Your only risk is forgetting a due date.
If it isn’t, you are borrowing against paychecks you haven’t makes yet. Vivian’s clothing installments compete with a $1,075 house payment and her car note. When a 0% plan can’t be covered, the fallback is a credit card or a longer interest-bearing loan. That is where the 36% row of the table takes over.
Four Moves Before You Press That Button Again
- List every open plan. Write each remaining balance and due date from every BNPL app on one page. Several small plans running at once hide the total, and Janelle’s balance only looked small until it sat next to her household’s other debt.
- Read the APR before you accept. If a checkout screen shows anything above 0%, use the table above to work out the real cost. Then compare it with simply waiting a month and paying cash.
- Run the cash test. Move the full purchase price into a separate savings account before you split it. If you can’t, you can’t afford the purchase yet.
- Clear what you owe, then stop. Ramsey told Janelle that “$250 on Affirm is not going to kill you. Get that knocked out. But never touch that button again the rest of your life.” Pay off the smallest plan first and delete the saved payment option at your favorite retailers.
Pay in 4 is free only when the cash already exists. For everyone else, Ramsey’s rule is the cheaper one.
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Jake has been been working in financial media for almost 15 years. He focuses on all things personal finance for 24/7 Wall St. with high hopes to educate and entertain. Most recently, Jake spent 12 years working various roles at The Motley Fool. He started copy editing fool.com content, worked on premium and marketing campaigns, and helped launch The Ascent, a personal finance brand.
His work has been featured on platforms like MSN, Yahoo Finance, USA Today, and more. He's written about credit cards, social security, ETFs, savings accounts, and just about anything else you can imagine when thinking about money. Jake love to cook, play golf, and tell people he's never had a cavity. (It's true!)
