Splitit

Splitit operates on an incredibly unique, highly clever mechanical loop that completely bypasses the massive credit risk taken by Klarna and Affirm. Splitit does not issue new credit, it does not do credit checks, and it does not charge the consumer interest or late fees. It simply utilizes the "Available Balance" on the consumer's existing Visa or Mastercard. Here is how it works: If a consumer wants a $1,000 laptop, Splitit places a massive $1,000 "Hold" (authorization) on their existing credit card, but only actually *charges* them $250 for the first month. The next month, it charges $250, and reduces the hold to $500. It guarantees the merchant gets paid because Splitit has already legally locked up the funds on the consumer's existing credit card. It is heavily favored by luxury merchants (like massive jewelers or high-end furniture stores) who have very high-income customers. These customers already have massive credit card limits, they just don't want to pay a $5,000 bill in one month. Splitit allows them to spread the cost over 12 months, earning their credit card reward points, without filling out a humiliating credit application.