AFRM Is the Biggest Winner of a Credit Card Rate Cap
I was laying in bed last night thinking about the news regarding a 10% cap on credit card interest rates.
And there's a huge winner.
(but it’s not shorting $Visa(V)$ or $MasterCard(MA)$ like everyone’s screaming about)
It's the BNPL trade.
Why? If credit card issuers get forced into a 10% cap, they’re going to pull back on risky borrowers...really fast, which instantly removes access to credit for millions of people.
But (obviously) those consumers can't just stop spending, so they just migrate to using something else.
...and the only place for them to migrate is *buy now, pay later*.
Trump's announcement becomes a *structural* tailwind for BNPL adoption.
Without access to credit, people get pushed to alternative "credit" rails.
We literally just saw record numbers of BNPL activity over the holiday season. Demand is there.
So you have tightening credit, record demand, and a political catalyst that steers millions of consumers into BNPL by default?
aka an entire sector is on the verge of re-pricing...
I'm watching a few BNPL names:
One. $Affirm Holdings, Inc.(AFRM)$ ...cleanest pure BNPL exposure in the usa with a huge merchant network, and a direct volume lift coming
Two. $Klarna Group plc(KLAR)$ ...largest BNPL platform in the world, recent IPO, eating market share in the US quickly
Three. $PayPal(PYPL)$ ...massive distribution, "PayPal Pay Later" is already everywhere at checkout
Four. $Block, Inc.(XYZ)$ (owns cashapp + afterpay)...exposure to BNPL + consumer lending rails...secondary winner
But my top focus is AFRM.
> more direct exposure & sensitivity to the U.S. credit tightening catalyst
> affirm is overwhelmingly us-centric
> stronger U.S. merchant penetration
> direct $amzn integration
> exclusive partnership with $shop
I like KLAR too, but if this 10% cap only applies to the USA, then AFRM is the most direct, immediate beneficiary.
This theme is about to really heat up.
AFRM is currently $81.80.
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