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Should new-to-credit individuals use BNPL to build their credit score?
MINT· 2025-09-17 06:51
Core Insights - The report by Paizabazaar highlights the growing trend among young individuals, particularly Gen-Z, to build and maintain good credit scores, with 25% of participants aged 18 to 28 having an average credit score of 742 [1][2]. Group 1: Understanding BNPL - Buy Now Pay Later (BNPL) is a short-term financing option that allows users to purchase products or services on credit, with the merchant receiving payment from the BNPL provider [4]. - BNPL facilities are typically offered by e-commerce platforms, fintech companies, and banks through partnerships with lending institutions [6][12]. - Repayment options for BNPL vary, with some providers offering the choice to pay the full amount next month or through EMIs over 3 to 12 months, with no interest for full repayment [7][8]. Group 2: Building Credit with BNPL - New-to-credit customers can utilize BNPL as a means to establish their credit score, as repayment data is reported to credit information companies [13][14]. - Regular repayments through BNPL can lead to an increase in credit limits, allowing for larger purchases over time [11]. - A good credit score developed through BNPL can facilitate access to traditional loans and credit cards in the future, although banks will consider additional eligibility criteria [19]. Group 3: Risks of BNPL - Failure to repay BNPL amounts on time can significantly harm an individual's credit score, as delays are reported to credit information companies [16][17]. - Loan defaults can remain on credit reports for years, complicating future borrowing opportunities [17].
Can Costco's Affirm Tie-Up Accelerate Digital Sales in Q4?
ZACKS· 2025-08-18 13:26
Core Insights - Costco Wholesale Corporation's partnership with Affirm to offer "Buy Now, Pay Later" (BNPL) financing is expected to enhance digital sales, particularly for high-value items like appliances and electronics, by reducing psychological barriers for budget-conscious consumers [1][3] Digital Sales Performance - E-commerce comparable sales increased by 14.8% in Q3 of fiscal 2025, with website traffic rising by 20% and average order values up by 3% [2][8] - Costco Logistics reported a 31% year-over-year increase in big and bulky e-commerce deliveries, indicating a strong demand in this segment where BNPL could further drive adoption [2][8] Competitive Landscape - Competitors such as Walmart and Amazon have already integrated BNPL options into their platforms, with Walmart focusing on seasonal items and electronics, while Amazon offers Amazon Pay Later to facilitate monthly payments [5][6] Financial Metrics - Costco's stock has performed well, with shares increasing by 11.4% over the past year, surpassing the industry's growth of 7.7% [7] - The Zacks Consensus Estimate indicates year-over-year sales growth of 8.1% and earnings per share growth of 11.6% for the current financial year [10] Valuation - Costco's forward 12-month price-to-earnings ratio is 48.96, which is higher than the industry average of 32.67, reflecting a Value Score of D [9]
Is Costco's BNPL Push a Catalyst for Big-Ticket E-Commerce?
ZACKS· 2025-06-05 15:21
Group 1: Core Insights - Costco Wholesale Corporation has launched a Buy Now Pay Later (BNPL) initiative in partnership with Affirm, targeting high-ticket categories through its e-commerce platform [1][7] - The BNPL option aims to reduce psychological barriers to purchase, particularly for younger and budget-conscious consumers, potentially unlocking new purchasing behaviors in large-item categories [2][3] - Costco's e-commerce comparable sales increased by 14.8% in the third quarter, with the BNPL initiative expected to further enhance this growth momentum [3][7] Group 2: Competitive Landscape - Competitors such as Walmart and Amazon have already integrated BNPL options into their platforms, with Walmart focusing on seasonal items and electronics, while Amazon offers Amazon Pay Later for easier access to higher-priced items [4][5] Group 3: Financial Performance and Estimates - Costco's stock has performed well, with a year-to-date increase of 14.8%, surpassing the industry's growth of 8.7% [6] - The Zacks Consensus Estimate indicates year-over-year growth of 8.1% in sales and 11.9% in earnings per share for the current financial year [9] - Costco's forward 12-month price-to-earnings ratio is 54.21, higher than the industry average of 34.39, indicating a premium valuation [8]