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Max Levchin had just taken his company public and was looking to also go for a spin. On the heels of a PayPal deal<\/a> that swiftly made him a multi-millionaire, Levchin sought to deliver on that classic \u201cmaking it big\u201d purchase that many dream of\u2014 a car. But his credit card debt pumped the brakes ever so slightly on his goal.\u00a0<\/p>\n \u201cBorrowing was really difficult,\u201d Levchin tells Fortune<\/em>, noting that he was told to pay cash because his credit card score was too low. \u201cI thought there was a better way to do payments and lending,\u201d he says of his venture that came down the line.<\/p>\n Born in Ukraine, Levchin immigrated to Chicago in his teenage years and bought his first credit card when he went to college. Self-admittedly operating with a lack of personal finance education, he \u201cpromptly got into a bunch of debt and paid a lot of late fees,\u201d sinking his credit score. The purchase \u201csort of stayed with me,\u201d he says, explaining that even after paying every late bill his credit score \u201cwouldn\u2019t recover for a decade.\u201d\u00a0<\/p>\n Decades more passed, and the former co-founder of PayPal<\/a> decided that it was time to try out a different system that he believed would be less damaging. Founding the buy now, pay later online service Affirm in 2014, Levchin had his own experience in mind. \u201cI should go and build a better payments platform that had accommodations for people that didn\u2019t understand how lending worked,\u201d he says of his thought-process. The service, as he envisioned it, would deter users from making mistakes but wouldn\u2019t take advantage of them if they did.\u00a0\u00a0<\/p>\n Claiming that \u201cAffirm is better for the consumer than using a credit card,\u201d he says that service has no late fees, though the website<\/a> does note that they may charge loans if a payment is \u201c120 days past due.\u201d Speaking of \u201cstaying aligned\u201d with the customer\u2019s financial success, he describes a mutually beneficial relationship wherein Affirm is motivated by the user easily completing payments.<\/p>\n To be sure, despite his aspirations to reinvent the system, it\u2019s yet to be realized if Levchin has just hit copy-paste on it instead. Affirm and its buy-now-pay-later (BNPL) peers, which include the likes of Klarna, Afterpay, and (briefly) Apple<\/a>, have themselves been accused<\/a> of reproducing the very same problem they claim to solve.\u00a0<\/p>\n More than half (56%) of BNPL users report that they\u2019ve experienced at least one issue with the service, including \u201coverspending, missing payments and regretting purchases,\u201d per a Bankrate survey<\/a> of more than 2,200 adults. And that spending could cause a ripple effect, as a separate survey conducted by Harris Poll for Bloomberg News<\/a> finds that 28% of\u00a0 BNPL users were behind on other debts because of their spending.\u00a0<\/p>\n \u201c[BNPL] is marketed as interest-free, but consumers can find that they end up being charged more than they think they will,\u201d senior policy and litigation counsel at the Center for Responsible Lending, Nadine Chabrier, told Vox<\/a> last year. The Consumer Financial Protection Bureau seems to agree, ruling<\/a> earlier this month that BNPL plans must be regulated like credit cards.\u00a0<\/p>\n \u201cFrom a regulatory perspective, and really from an intellectual perspective, there\u2019s not a lot of difference between a credit card product and a \u2018buy now, pay later\u2019 product,\u201d Gil Luria, managing director at wealth management firm D.A. Davidson, told Fortune\u2019s<\/em><\/a> Michael del Castillo. \u201cIn terms of the consumer perception, they are different products.\u201d\u00a0<\/p>\n But Levchin sees it differently. \u201cI have infinite conviction that if U.S. consumers would just switch entirely\u2026to using binary affiliate products instead of credit cards, we would be in a healthier financial position as a nation,\u201d he said.\u00a0<\/p>\n \u00a0\u201cThe reason United States consumers have $1.1 trillion in current outstanding credit card debt is because there\u2019s no real motivation on the part of credit card issuers to tell you, \u2018hey, you got to pay this thing off,\u2019\u201d he says.\u00a0\u00a0<\/p>\n<\/div>\n\nA whole new world, or the same one with BNPL\u00a0<\/strong><\/h2>\n