NEW YORK – Dreaming of a vacation, but don’t have the cash for the airfare? You can now pay for your plane tickets in monthly installments.
CheapAir.com has teamed up with financial services company Affirm to allow fliers to take out three, six and 12-month purchase plans to cover their airfare.
Here’s how it works: After selecting flights on CheapAir, customers can choose to make monthly payments on the checkout page. They have to provide their name, email and street addresses, date of birth, cellphone number and the last four digits of their Social Security number to help Affirm run a credit check. The check will not affect a customer’s credit score.
The interest rate on the loans are based on credit worthiness and range from 10%-30% APR.
The average APR on new credit card offers was 15.19% last week, according to CreditCards.com Weekly Credit Card Rate Report.
Travelers will get approval within seconds, according to CheapAir.com CEO Jeff Klee, and there’s no limit on how many tickets you can request financing for. But financing is only available for tickets that are $100 or more.
The new payment method is aimed at travelers who don’t have a credit card or can’t afford their trip.
“When you want to take a vacation, it’s a lot of money to put up out front and you might not be able to manage it all at once,” said Klee. “Spreading it out … makes it become more easy to manage.”
Klee said CheapAir has been “aggressive” about embracing payment alternatives to credit cards. The website also allows customers to pay with Bitcoin and cash through Western Union.
“Anything that competes with credit cards I think is a good thing,” he said. “This is one more option, and the more options, the better.”
Despite more travelers hitting the skies, airfare prices have been dropping recently thanks to lower fuel costs and more capacity. Airlines have been expanding their routes and adding flights in the wake of lower oil prices.
Airfare prediction app Hopper expects airfare will continue its descent this fall, with domestic tickets decreasing 8.2% to hit $213 in October.