Whether you need a new watch, a new sweater, or the perfect decor for your Christmas party, you don’t need money anymore – not even a credit card to make it yours.

“Buy now, pay later” is the premise of San Francisco-based Affirm, founded by Max Levchin in 2012. Several technology companies, including Afterpay and Klarna, offer these point-of-sale loans, or instant payment plans, as an alternative. to credit cards. But with interest rates as high as 30%, critics see the old-fashioned loan shark with a Silicon Valley smile.

“How many people are doing this?” CBS News correspondent Tony Dokoupil asked.

“We never really disclosed, but it’s millions and millions,” Levchin said.

“And billions and billions of dollars in outstanding loans.”

“Correct,” Levchin said.

Demand is largely driven by millennials, or Generation Z, many of whom fear credit card debt. Affirm said that because their payment plans have a predetermined interest rate with no compound interest or hidden charges, customers know exactly how much they will pay each month for the product they purchase.

“So we limit the transaction to one thing you want to buy from the store … at the price you want to buy, and that creates financial certainty for our customers, especially those who really need it,” Levchin said.

Levchin said the average Affirm loan is around $ 799, which takes “a typical term” of around 11 months to pay off.

He said the company was using its own formula to approve loans to more people, including people with bad credit or no credit at all. Each purchase will show up as a separate loan on your credit report, and problems with the loan can quickly hurt your credit score.

Steven and Jessica Briskman found out last year when they tried to return a camera they bought to promote their business.

“We didn’t open the box. We slapped that sticker back on… we sent it back. We expected everything to be okay from there,” Jessica said.

Although they said it was easy to use the service, the process to finally cancel their loan was a “nightmare”.

“An absolute nightmare,” Jessica said. “Seven months later, two hits on my credit and having a hard time getting a loan, you know – that just wasn’t right.”

We asked Affirm what would happen to customer loans if products, like Briskman’s camera, were returned. The company said the return policy may vary from merchant to merchant, but if the merchant offers a full refund, the company will make every effort to unwind the loan.

Personal loan balances in America, which include this type of financing, have more than doubled since 2014. They have grown five times faster than credit card debt between the first quarter of 2017 and the same period this year.

Lauren Leimbach is the Managing Director of the consumer advocacy group Community Financial Resources. She warned that Affirms’ average interest rate – 17% – is similar to that of most credit cards, and that marketing appears to encourage irresponsible purchases by young people who may not be able to afford it.

“The way it’s structured, it’s not a moment of reflection. It’s do you want to make the purchase or not,” Leimbach said. “So the product could be a very useful product, but at the moment the way it’s marketed allows for bad behavior.”

“How do you respond to the criticism that you allow frivolous purchases from classic consumers that people don’t really need?” Dokoupil asked Levchin.

“I just find it very, very difficult to claim the authority that we know what people need,” Levchin said.

“You’re inviting people to a road where they might not be able to pay the bills.”

“No, I invite them down the path to responsibly access things they should be able to afford,” Levchin said.

Dokoupil posed the idea of ​​a hypothetical client: “I used Affirm to get pants for work in the fall, I paid for it, it cost me $ 20 in interest. $ 20 which I don’t have for those pants in the spring. Now I’m on another Affirm loan, now it’s $ 40, then it’s $ 80. ”

“Is the alternative to go without pants?” Levchin said with a smile.

The gist of consumer watchdogs is this: If you can pay your credit card on time, its interest will likely be lower than Affirm’s. And if you can’t, well, it might be wise not to buy it.