Is Costco Executive Membership a waste of money?

Costco offers two membership levels. There is a Gold Star membership for $60 per year and an Executive membership for $120 per year.

You may be tempted to consider an upgraded membership because joining the Warehouse Club offers some benefits that the Gold Star membership does not. But would doing so be a waste of your hard-earned money in your bank account, or would it be the right choice?

Here’s how to decide:

How much do you spend at Costco?

There’s one big question you should ask yourself first that will help you decide whether it makes sense to pay an extra $60 for an Executive membership. Ask yourself how much money you’ll actually spend at Costco over the course of a year.

The reason this is important is because the Costco Executive membership gives you 2% annual rewards on eligible purchases. Once a year, you’ll receive a reward equal to 2% of the amount you spend at Costco throughout the year, with a maximum reward of $1,000.

Now, a quick calculation shows that if you spend $3,000 a year at Costco, you’ll end up getting $60 back on it. So, if you frequently use your credit card to spend more than this amount, an Executive membership may be worth it. The cashback you earn will cover the additional cost of upgrading your membership.

If you spend more At over $3,000, your membership more than pays for itself. For example, let’s say you spent $6,000 at Costco over the course of a year. You’ll get back $120 and Costco would have paid you $60 for your upgrade choice.

However, if you’re spending less than $3,000, you might be better off with a Gold Star membership. Unless You can take advantage of other exclusive benefits that Executive membership offers.

Would you like to take advantage of other Executive Membership benefits?

While the 2% annual reward is the biggest benefit for most people, there are other benefits to Executive membership as well.

These benefits include cheaper checks on check printing services or greater discounts on other services offered through Costco’s partnership, including discounts on car insurance. Free roadside assistance is also provided to those covered through Costco’s auto insurance program.

If you plan to spend less than $3,000 per year at Costco, read the Executive membership benefits carefully. If you won’t be using any of our other services, such as home, car, pet insurance, or printing services, it’s best to choose the Gold Star membership level.

For many, the biggest attraction isn’t these additional services, but Costco gas and warehouse club purchases. So the additional cost savings may not be a reason to pay the upgraded membership fee. But it all depends on your goals for joining a warehouse club and your shopping patterns.

The important thing is that by taking the time to understand the value of these additional benefits, you can make the choice that’s right for you.

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