The buy now, pay later option has grown popular with consumers as it gives an alternative payment option rather than racking up credit card debt, which has ballooned to staggering figures. According to Adobe Analytics, the buy now, pay later (BNPL) plans accounted for $760 million in Black Friday purchases and $940 million in Cyber Monday purchases, a sizable jump compared to last year.

Affirm CFO Michael Linford (AFRM) joins Yahoo Finance to discuss the BNPL company's insights into how consumers are using alternative payment options while facing debt risks.

"Because we approve every transaction, we're able to look at the consumer's financial health at the time they're making a purchase and our approval or decline decisions — or our decisions that inform the level or type of product that we're allowed to offer to a consumer — are informed by their ability to re-pay," Linford says. "That's a very different mode than a credit card where a line is established and consumers will experience stress or anything that happens in their life and still tap the credit card."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

SEANA SMITH: Michael, when it comes to the purchases and the data that you've seen over the last week or so with the holiday season, what are consumers that are using your firm and opting for that buy now, pay later service, what are they spending on?

MICHAEL LINFORD: Yeah, we're really fortunate to have a wide set of categories that we serve, everything from general merchandise to home and lifestyle brands to electronics companies. And really, the only notable trend is a continuation that we've seen starting with our most recently reported quarter, which is some of the COVID winners that really did see material declines throughout all of last year beginning to show signs of real growth. And they're coming in categories that showed outsized growth during the pandemic, showed a little bit of compression and reduction last year, and are beginning to come back to life. And we think that's a really healthy sign for the categories and really for the consumer overall. The spending is broad based and really touching across all categories.

BRAD SMITH: Michael, we're currently looking at the highest balance among total credit cards here in the US in the third quarter of 2023, it hit $1.079 trillion according to the Federal Reserve Bank of New York. When you think about the service that a firm offers and where you've got people able to pay in installments at the end of the day, is there any determining factor that you would look at among a consumer to say, OK, this doesn't seem right for us to offer this buy now, pay later or buy now pay in installments type of service or option to them?