Podcast Summary: Rich Habits Podcast

Episode 153: An Honest Conversation w/ Affirm CEO Max Levchin
Hosts: Austin Hankwitz & Robert Kroke
Guest: Max Levchin, CEO of Affirm and co-founder of PayPal
Date: January 19, 2026

Episode Overview

This episode features a candid and in-depth conversation with Max Levchin, CEO of Affirm and co-founder of PayPal. The primary focus is on demystifying the structure of credit in America—exploring credit cards, the Buy Now, Pay Later (BNPL) model, and why not all forms of credit are equal. The discussion dives deep into the mission and mechanics of Affirm, differences with traditional credit products, and how AI is shaping the financial future.

Key Discussion Points and Insights

1. The Role of Credit in Modern Society

[04:23 – 07:10]

• Max Levchin: Credit, when used thoughtfully, is an investment in your future self. It enables opportunities like education, homeownership, and small business ventures.
  • "Thoughtful, responsible usage of credit is basically investing in your future self, your future success." — Max Levchin (05:00)
• Credit is also a tool for smoothing personal cash flow, even for routine or emergency expenses:
  • "Credit...provides that sense of control and certainty of your personal finances." — Max Levchin (07:04)

2. Not All Credit is Created Equal

[07:14 – 19:54]

• Credit Cards (Revolving Credit):
  Revolving credit lacks transparency — you rarely know when your debt will be paid off, and compounding interest makes the real cost difficult for consumers to calculate.
  • "The basic difference between revolving credit and not is you're essentially signing up to a product that gives you no sense for when you're going to be out of debt." — Max Levchin (07:33)
• Installment Loans & BNPL (e.g., Affirm):
  Every transaction has a clear beginning and end. You know how much you owe and by when. There are no late fees or compounding interest.
  • "With Affirm you do [know the true cost]... You can just use something like affirm... and feel easier and better about yourself and about your money and not worry, when will I be done paying it off?" — Max Levchin (13:17)

Memorable Moment:

• Max and his CFO struggled on a cross-country flight to calculate by hand the actual cost of paying off a credit card, underscoring the complexity and opaqueness of revolving credit for even financial professionals (13:18).

Why the Difference Matters:

• Linear (installment) versus exponential (revolving) debt is fundamentally easier to understand, predict, and plan for.
  • "Planning against exponential curves is like basically impossible." — Max Levchin (12:20)

3. Why Don't Legacy Players Change?

[15:08 – 19:54]

• Revolving credit cards are highly profitable due to their complexity and the inertia of consumer misunderstanding.
  • "Once you taste that profitability, it's very hard to go back. You have shareholders...with so much profitability." — Max Levchin (16:09)
• The BNPL model is spreading: over half of US market activity in BNPL now avoids late fees, a trend Affirm pioneered.
  • "People are generally realizing that if you treat the consumer right, they are loyal to you. North of 95% of our transactions come from repeat customers." — Max Levchin (17:37)

4. Affirm’s Unique Approach: Underwriting Every Transaction

[22:15 – 25:24]

• Affirm underwrites each transaction individually, not open-endedly like credit cards, allowing for more responsible lending.

  • "What if we made purchasing conscious? What if we gave ourselves a voice that would allow us to make it cheaper for both sides? ... Sometimes Affirm will say: this seems like something we need to learn more about. Can you tell us your income, or...see into your bank account?" — Max Levchin (22:40)

• Lower delinquencies and defaults reflect this responsible, communicative model.

5. Underwriting at Scale: AI and Fairness

[25:53 – 28:05]

• All Affirm underwriting is automated; AI and machine learning allow for unbiased, scalable, and efficient decisions.
  • "Every transaction is underwritten by machines. No humans are involved...Machines are really, really good. They're also very good at saying things like, I will not consider race." — Max Levchin (25:53)
• Affirm’s roots as an “AI company before it was cool.”

6. Personal Motivation & The Origin of Affirm

[28:00 – 32:32]

• Max’s embarrassing experience being denied a car loan post-PayPal success, due to a lingering bad credit score from a college mishap, inspired him to create a better credit system.

  • "The mistake I made in college, which I rectified very quickly, was six years ago, and my credit score hadn't recovered and I looked like a total idiot in front of the girl I was trying to impress at the time." — Max Levchin (28:05)

• Empathy from living through a broken system propelled Affirm’s mission.

7. Culture & Mission as Fuel

[33:15 – 35:49]

• Affirm’s mission to bring clarity and positivity to consumers’ relationship with money energizes Max.
  • "It was important to young me, it's important to old me, and I think it's important to a lot of people worldwide. So that—that motivates me." — Max Levchin (33:15)
• Pursuit of fixing the many pain points still embedded in the financial system.

8. The Future: AI & Custom Interfaces in Finance

[36:56 – 39:03]

• Advances in AI and statistical learning are providing new, more transparent, and more accessible financial products.
  • "Being able to just give access to easy to understand, easy to communicate in language of your choice with the metaphors of your choice for every human...is going to be very, very powerful." — Max Levchin (39:03)

Notable Quotes By Timestamp

• Max Levchin on credit as investing in your future:
  "Thoughtful, responsible usage of credit is basically investing in your future self, your future success." [05:00]
• On the pitfalls of credit card debt:
  "The basic difference between revolving credit and not is you're essentially signing up to a product that gives you no sense for when you're going to be out of debt." [07:33]
• On why the system resists change:
  "Once you taste that profitability, it's very hard to go back. You have shareholders...with so much profitability." [16:09]
• On transparency in BNPL:
  "No one knows what the true cost of credit is. And with Affirm, you do." [13:17]
• On technology and fairness:
  "Machines are really, really good...I will not consider race. I will not find out what race you are...it's much easier...to build a really good, very fair model." [25:53]
• On the mission:
  "We want to be there for you, making you feel great about your money instead of stressed." [35:00]
• On AI in finance:
  "Being able to just give access to easy to understand, easy to communicate in language of your choice with the metaphors of your choice for every human...is going to be very, very powerful." [39:03]

Timestamps for Key Segments

• [05:00] Max on credit as investing in your future
• [07:33] Structural differences between credit cards and BNPL
• [12:20] Why linear debt is easier to plan and manage than exponential debt (credit cards)
• [13:18] Anecdote on difficulty calculating credit card total cost
• [16:09] Why the system favors revolving credit and is slow to change
• [22:40] Why Affirm underwrites each transaction and how it helps consumers
• [25:53] How AI drives Affirm’s underwriting process and fairness
• [28:05] Max's personal story about being denied a car loan after PayPal
• [33:15] What motivates Max—mission and never-ending problems to solve
• [35:00] Vision for Affirm: making people feel good about money
• [39:03] AI transforming the consumer financial experience

Memorable Moments

• The Math of Debt:
  Max’s story about failing to calculate true credit card cost on a flight is both humorous and illustrative—if two financial professionals can't do it, what about regular consumers?
• The Car Loan Rejection:
  Despite massive success, Max is denied a car because of a “deadbeat” credit score originating from one missed payment years before: a powerful motivation for what would become Affirm.

Tone and Language

• Conversational, approachable, and honest—both hosts and Max favor straightforward language, break down complex financial concepts, and are candid about past mistakes and industry practices.

Final Takeaways

• Credit can be a powerful tool for building the future but only if its terms are clear and responsible.
• The financial industry's incentives often conflict with consumer well-being; new models like BNPL (specifically Affirm) are challenging the status quo.
• Technology—especially AI—can solve many longstanding equity and transparency issues in finance.
• Personal stories and empathy can fuel transformative business missions.

Where to Learn More

• Max Levchin:
  • LinkedIn
  • Twitter (X):** @mlevchin
• Affirm:
  • Affirm on Twitter (X)
  • Affirm Website

"You use Affirm when it matters to you—and money just matters all the time." — Max Levchin [34:59]

For those interested in responsible credit, transparency, and how technology is reshaping finance, this episode is both an education and an inspiration.