Costco offering buy now, pay later for online items

Online U.S. Costco shoppers can now break up purchases over $500 into monthly payments over a longer period, following a new partnership with payment network Affirm.

Newsweek has reached out to Costco and Affirm for comment via email on Sunday.

Why It Matters

Costco, known for its massive warehouses and bulk goods, is the world’s third-largest retailer and a membership-based giant with more than 130 million cardholders worldwide. The large retailer has over 620 warehouses across the U.S.

The “buy now, pay later” model has surged in popularity, particularly among younger consumers and those looking to manage short-term cash flow constraints

Americans hold more than $1.2 trillion in credit card debt, according to the Federal Reserve. While pay-later platforms like Affirm offer added flexibility for consumers making purchases who may not have the bandwidth to pay with their debit card at the moment, some finance experts caution against using these types of platforms due to the financial risks, increased spending, and high interest rates.

What To Know

As of May 14, online Costco shoppers can “use Affirm at checkout to pay overtime without any late or hidden fees,” Affirm’s press release said. The flexible payment option is not offered to in-store shoppers.

The multi-year partnership allows Costco members to finance online purchases between $500 and $17,500 through a buy now, pay later model. Costco said on its website that “many items online are eligible.”