Costco Offering Buy Now, Pay Later With Affirm. But Is It Worth It?

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Costco recently announced it's partnering with Affirm to offer its customers Buy Now, Pay Later plans for online purchases between $500 and $17,500. This BNPL plan lets you split a purchase into up to 36 payments across several months, and charges interest. A typical pay-in-four BNPL that you may be familiar with lets you split a purchase into four weekly payments, with no interest..

However, using a BNPL plan isn't necessarily always a good deal, and unlike some BNPL plans, Affirm's option charges interest. If the interest accrued substantially increases how much you'd spend -- under the guise of convenience or low monthly payments -- it's not actually a deal. And not everything should be financed, either (looking at you, DoorDash).

So if you're planning to shop online with Costco this Memorial Day, you'll likely encounter Affirm's BNPL option. Here's how to figure out how much the plan could actually cost you before you decide whether to use it.

What's Costco's new Affirm BNPL plan?

Your standard BNPL plan usually lets you split a purchase into four weekly payments over the course of a month, and won't charge any interest. This BNPL plan through Affirm lets people split purchases of $500 or more into three to 36 monthly payments. 

Interest rates range from 10% to 36% APR, but Costco BNPL plans charge simple interest, meaning interest accrues only on the principal balance. So if your balance is $1,000 and your interest rate is 5%, you'd accrue $50 in interest each month.

That's different than compounding interest, the way credit card balances charge interest. Compounding interest will end up costing you much more over time than simple interest because it snowballs. 

Each month's interest is added to the original balance, then interest accrues on the new balance each month. Based on the previous example, the $50 you accrued in interest the first month would be added to your original balance of $1,000. So you'd accrue interest on $1,050 the next month, and so on.

Your interest rate will depend on your credit history. When you apply for a BNPL, Affirm will run a soft credit check, which means it won't impact your credit score.

How to use Affirm at Costco

You can choose Affirm as your payment method at checkout for online purchases. 

You'll need to provide some additional info to get approved to use Affirm:

• You'll need to submit your license, passport, identity card or resident permit by uploading a photo of whichever you choose. 
• Connect your phone or laptop to take a photo of yourself with your camera.
• You'll need to enter your income and provide the last four digits of your Social Security number.

You'll then pick from the payment plans offered. Each option will show the length of the repayment period, what your monthly payment will be and how much interest you'll end up paying. 

You'll need to manage payments through the Affirm app or on affirm.com. You can manually make your monthly payments, set up automatic payments or pay off your balance early. You'll pay less interest if you pay it off early.

Should you use it? We do the math

BNPL can be a good tool for financing a larger purchase, but it can sometimes be confusing to know how much you'll actually end up paying. We'll run through a few purchase examples to give you an idea of how much you might pay. 

This test was also a good way for me to find out that Costco charges a 5% non-membership fee. So you're numbers may look different if you're a Costco member.

Thomasville Lowell Corduroy 8-piece Modular Sectional

If you're looking for a new couch, you might've seen this 8-piece modular sectional everywhere on social media. It costs $2,499.99, or $2,834.21 after estimated taxes. 

After going through the Affirm soft credit check, I was offered a payment plan of 12, 18 or 24 months. The longer the plan, the higher the interest charge. Also, I got socked with the non-member surcharge -- $125 in this case.

• The 12-month plan would cost me $124.23 in interest, with 12 payments of $246.54, for a total cost of $2,958.44.
• The 18-month plan would cost $182.71 in interest with 18 payments of $167.61, for a total cost of $3,016.92.
• The 24-month plan would cost $242.16 in interest with 24 payments of $128.18, for a total cost of $3,076.37. 

For all plans, I was given an APR of 9.99% but with something called "Costco Value" that rate was reduced to 7.99%.

Screenshot by Evan Zimmer/CNET

LG 65" Class – OLED C4 Series – 4K UHD OLED TV

How about a new TV to go with that couch? The LG 65" Class -- OLED C4 Series -- 4K UHD OLED TV (our editor's choice pick for best TVs for 2025) has a price tag of $1,299.99 at Costco, for a total of $1,474.19 with tax and the $65 non-member fee. 

Again, each plan came with an APR of 9.99%, which was reduced to 7.99% by "Costco Value." 

Here's what Affirm offered:

• The 6-month plan would cost me $34.56 in interest, with six payments of $251.46, for a total cost of $1,508.76, according to Costco's estimate.
• The 12-month plan would cost me $64.63 in interest, with 12 payments of $128.23, for a total cost of $1,538.76, according to Costco's estimate
• The 18-month plan would cost me $95.06 in interest, with 18 payments of $87.18, for a total of $1,569.24, according to Costco's estimate.

Screenshot by Evan Zimmer/CNET

Roborock Qrevo MaxV Robot Vacuum and Mop with 7,000 Pa Suction Power

What about a new robot vacuum to keep your entertainment space clean? Costco offers the Roborock Qrevo MaxV Robot Vacuum and Mop with 7,000 Pa Suction Power for $819.99. After taxes and a $57.50 non-member surcharge, it would cost me a total of $947.63. Affirm offered a 9.99% APR (7.99% from Costco Value) and:

• A 6-month plan that would cost $22.21 in interest, with six payments of $161.64, for a total of $969.84.
• A 12-month plan that would cost $41.53 in interest, with 12 payments of $82.43, for a total of $989.16.
• An 18-month plan that would cost $61.09 in interest, with 18 payments of $56.04, for a total of $1,008.72.

Screenshot by Evan Zimmer/CNET

Does BNPL impact my credit score?

Affirm reports your on-time and late payments to Experian and TransUnion. The impact of BNPL payments on your credit score depends on which credit scoring model is used. 

For example, FICO Score 9 doesn't take into account negative or positive BNPL payments but FICO Score 8 does. FICO Score 8 is still the most commonly used credit score, so you could see an increase or decrease depending on your payments.

Does BNPL save you money?

BNPL can break a large payment up into bite-sized pieces, which can help you find room in your monthly budget. However, it doesn't save you money. When you add in the interest you'll pay over time, the product will cost you more than if you had paid the total original amount up-front. If you're looking to save money, consider creating a sinking fund for the purchase instead.

Can you avoid interest charges entirely with the Costco/Affirm BNPL plans?

No. You'll always pay interest if you use one of these plans. If you're looking to finance a purchase over multiple months and avoid interest charges, consider a credit card with an introductory 0% purchase APR. 

There are great rewards credit cards with promotional periods that let you earn cash back or points. But keep in mind you'll undergo a hard credit check when applying for a credit card, which will typically lower your credit score temporarily by a few points. And if you don't pay off your credit card before the promotional period ends, you'll start accruing interest at a much higher APR -- the average for credit cards is more than 20%.

Also, you should only consider a new card if you actually need one and will continue to get value from it after the promotional period ends.

The standard pay-in-four BNPL also provides a no-interest financing option but four weeks is far shorter than the 12-, 15- or 21-month introductory purchase APR you can get with some credit cards. There's also usually a maximum amount you can borrow with this type of BNPL plan.

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Costco is best known for selling household items and groceries in bulk (plus seemingly inflation-proof rotisserie chickens). If you're thinking of becoming a member, you could save $20 with a digital gift card by signing up for the Gold Star membership* for $65 through StackSocial.

This Gold Star membership is valid for one year and must be redeemed before June 30, 2025 once your purchase is made. Your gift card will be delivered to your email within two weeks of activating your card.

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