When I first joined Costco, it was just me, and I didn’t spend nearly as much on groceries as I do now with a family. But as my family grew, so did my grocery bill, which led me to upgrade to an Executive membership.
Despite the higher cost, I’ve held onto that membership for years, and here’s why I won’t be giving it up anytime soon.
A Higher Fee Worth Paying
Costco offers two types of memberships: the Gold Star membership, which costs $60 a year, and the Executive membership, which costs $120. Starting September 1, these prices will increase to $65 and $130, respectively.
While it may seem steep to pay double for the Executive membership, the benefits far outweigh the additional cost, especially if you’re a frequent Costco shopper like me.
The biggest perk of the Executive membership is the 2% cash back on most purchases. When you shop at Costco as much as I do, this benefit quickly adds up. I make a Costco run almost every week, spending at least $100 each time.
That’s just the cost of feeding a family of five and stocking up on household essentials like paper towels, tissues, and cleaning supplies.
Beyond groceries, I often turn to Costco for one-off purchases, like new fall jackets for my kids or holiday gifts for teachers. All these purchases contribute to my annual Costco spending, making it easy to recoup the cost of the Executive membership upgrade and then some.
Breaking Even and Beyond
Currently, you need to spend $3,000 annually at Costco to break even on the $60 upgrade cost between the Gold Star and Executive memberships. After the fee increase, that break-even point will rise to $3,250.
However, given that my annual Costco spending exceeds $5,000, the math is in my favor. At $5,000 in spending, I’ll earn $100 in cash back, which not only covers the $65 upgrade fee but also leaves me with extra money in my pocket.
The Safety Net of an Executive Membership
One of the biggest reasons I’ll continue with my Executive membership, even if my Costco spending decreases, is the built-in safety net that Costco provides.
If you don’t earn enough cash back to cover the additional cost of the Executive membership, Costco will refund the difference.
For example, if you pay the $65 upgrade fee but only earn $52 in cash back, Costco will refund you the $13 difference if you choose to downgrade your membership the following year.
This guarantee eliminates the risk of losing money on the Executive membership, making it a no-brainer to stick with it.
Even if my shopping habits change in the future and I find myself spending less at Costco, I know I won’t be financially worse off for having the upgraded membership.
The Flexibility of the Executive Membership
Life circumstances change, and so do shopping habits. While I currently make weekly trips to Costco, there may come a time when I’m not stocking up on groceries and supplies as frequently.
Perhaps my kids will have moved out, and I won’t need to buy as much food. Or maybe my priorities will shift, and I’ll start spending more on other categories like electronics or travel, which Costco also offers.
The beauty of the Executive membership is its flexibility. Even if I spend less on groceries, the cash back still applies to a wide range of Costco purchases.
And with the assurance that I can downgrade my membership and get a refund if I don’t earn enough cash back, there’s no downside to keeping the Executive membership.
Is the Executive Membership Right for You?
If you’re considering upgrading to an Executive membership or debating whether to renew it, take a close look at your annual Costco spending.
You might be surprised at how quickly the cash back can add up, making the higher membership fee worthwhile.
Even if your spending habits change, the safety net that Costco offers with its Executive membership ensures that you won’t lose money.
So, before you decide to stick with a basic membership, think about the benefits and consider whether the Executive membership could be a better fit for your shopping needs. For me, it’s a decision that has paid off, and I don’t see myself giving it up anytime soon.