Costco, the beloved wholesale retail giant known for its bulk bargains and loyal member base, is joining the growing wave of retailers offering flexible financing solutions. In a move that reflects shifting consumer preferences and a tightening economic landscape, Costco has officially introduced its own Buy Now, Pay Later (BNPL) program through a partnership with Affirm, a leading fintech company that provides installment-based payment plans.
This new offering will be available for select online purchases through Costco’s website and is designed to give shoppers more flexibility when making larger purchases, particularly in the $500 to $17,500 range. It’s a significant step forward for Costco, which has traditionally relied on a straightforward cash-and-carry model but is now adapting to the digital retail era and changing spending habits.
Costco’s BNPL program allows members to finance their purchases over time with payment terms ranging from three to 36 months. That means whether a shopper is buying a new refrigerator, upgrading their home office with a high-end computer system, or stocking up on premium furniture, they can spread out the cost into manageable monthly payments rather than paying in full upfront.
The flexibility, however, comes with interest charges. Affirm’s BNPL structure applies an APR (Annual Percentage Rate) that ranges from 10% to 36%, depending on the shopper’s creditworthiness, the loan term selected, and other factors. For example, a $500 purchase at a 20% APR repaid over six months would result in monthly payments of approximately $88.27, with the total repayment amount reaching $529.61—an added cost of nearly $30 in interest.
While that cost may seem reasonable for shoppers who need to stretch a big purchase across multiple paychecks, financial experts caution that BNPL plans aren’t without risk. Like any form of credit, late payments or missed installments can negatively impact a borrower’s credit score. And unlike traditional credit cards, many BNPL services—including Affirm—don’t allow flexibility to revolve a balance or carry it forward without fixed payment plans.
How Costco’s BNPL Program Works
Here’s a closer look at how the program operates:
- Eligibility: Available for online transactions totaling between $500 and $17,500 on Costco’s official website.
- Repayment terms: Options to repay in 3, 6, 12, 18, 24, or up to 36 months.
- Interest rates: APRs range from 10% to 36%, subject to approval by Affirm.
- Payment method: Payments are made through the Affirm app or website, though users can also enable autopay for added convenience.
- Approval process: Shoppers will see a real-time credit check performed at checkout to determine eligibility and rate.
- Transparency: Affirm prides itself on offering clear, upfront terms, with no hidden fees or compounding interest, so users know exactly what they’ll owe each month.
The service is already live on Costco.com, with Affirm presented as a payment option at checkout for qualifying transactions.
Why Is Costco Introducing Buy Now, Pay Later Now?
The move comes as consumer trends continue to favor payment flexibility, especially in the wake of rising inflation, stagnant wages, and high credit card interest rates. As families face pressure to budget more carefully, being able to divide a large expense over several months provides welcome breathing room.
Retailers across industries—from Apple and Amazon to Walmart and Target—have already rolled out their own BNPL programs, often in collaboration with companies like Affirm, Klarna, and Afterpay. According to recent data from Adobe Analytics, BNPL usage increased by 14% year-over-year in 2024, particularly for high-ticket items like electronics, appliances, and furniture.
Costco’s decision to join the BNPL trend is also in line with its broader digital transformation strategy. While the company continues to thrive on its warehouse-first model, it has invested heavily in improving its online shopping experience, expanding delivery options, and offering more value-added services through its website.
As younger generations like Millennials and Gen Z grow into Costco’s target demographic, offering flexible payment options becomes not just a convenience, but a competitive necessity. These groups tend to be more credit-wary than their predecessors, often preferring installment-based solutions to high-interest revolving credit.
What Can You Buy with Costco’s BNPL Program?
Although Costco hasn’t released an exhaustive list of eligible products, the BNPL plan can be used for larger online purchases that meet the $500 minimum requirement. Examples might include:
- Home appliances like washers, dryers, or refrigerators
- Electronics such as laptops, gaming consoles, and TVs
- Mattresses and furniture sets
- High-value fitness equipment
- Outdoor gear and patio sets
- Bulk items purchased for events or small business use
Whether you’re outfitting your home office, upgrading your kitchen, or preparing for a backyard renovation, the new Affirm financing option gives Costco shoppers a way to do so without blowing their immediate budget.
The Risks: What Shoppers Should Watch Out For
While the appeal of breaking up a major purchase into manageable payments is clear, it’s essential for consumers to understand the financial implications of using BNPL services.
- Interest costs: Depending on the loan term and APR, customers could end up paying significantly more than the original purchase price.
- Late payments: Missing payments can incur penalties and impact your credit score, especially since Affirm reports to credit bureaus.
- Approval isn’t guaranteed: Affirm will assess a customer’s credit history and other factors before offering a plan, and not all applications will be approved.
- No flexibility to carry over: Unlike a credit card, BNPL doesn’t let you pay the minimum and carry the rest. You’re committing to a fixed payment plan upfront.
- Impulse spending: BNPL can sometimes encourage customers to make purchases they can’t afford, thinking it’s “only $50/month,” even if that continues for two years.
Experts recommend using BNPL for planned, essential purchases, rather than spur-of-the-moment buys. For instance, buying a new refrigerator when your old one breaks makes more sense than using BNPL to finance a luxury item you could live without.
What This Means for the Future of Retail
Costco’s move reflects a broader shift in how retail operates in 2025. It’s no longer enough to offer low prices and quality products—flexibility, convenience, and financial options have become key differentiators in a crowded marketplace.
For Costco, offering BNPL financing aligns with its mission of helping members save money while offering real value. It’s not simply about adding a new checkout button—it’s about meeting customers where they are financially and providing tools to make large purchases more accessible.
As more consumers demand alternative payment options, we can expect to see further innovations in this space. Affirm has hinted at plans to expand its footprint within other Costco services as well, potentially integrating BNPL options into travel bookings, tire center services, or even annual membership renewals.
Final Thoughts
Costco’s introduction of a Buy Now, Pay Later program through Affirm marks a significant development in the retail landscape. It offers loyal members more purchasing power and payment flexibility, particularly for big-ticket items available online. With transparent terms, flexible repayment periods, and real-time approval at checkout, the program has the potential to be a helpful tool for customers managing tight budgets.
However, shoppers should proceed with financial awareness, fully understanding the cost of borrowing and the responsibility that comes with installment payments. As always, Costco delivers value—but as with any credit-based tool, the key is using it wisely.
For more information or to explore payment plans through Affirm, visit Costco.com and check eligibility during your next checkout.
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