Costco is renowned for offering high-quality products at competitive prices, making it a favorite among savvy shoppers. However, as of September 1, 2024, Costco will be increasing its membership dues.
The price of a Gold Star membership will rise from $60 to $65, while an Executive membership will jump from $120 to $130.
While this price hike might be a cause for concern for some members, it’s important to remember that there are still effective strategies to offset the cost of your annual membership.
In fact, with the right approach, you can essentially get your Costco membership for free. Here are three proven methods to do just that.
1. Upgrade to an Executive Membership
One of the most straightforward ways to cover the cost of your Costco membership is by upgrading to an Executive membership.
At first glance, the $130 annual fee might seem steep, but this membership comes with a significant perk: 2% cash back on eligible Costco purchases. This cashback reward can effectively cover the cost of your membership if you spend enough throughout the year.
To break it down, if you spend $6,500 annually at Costco—approximately $542 per month—you’ll earn $130 in rewards, which equals the cost of your Executive membership. For those who shop at Costco regularly, this target is entirely achievable.
Even if your annual spending is lower, say $3,250 (or about $271 per month), the rewards you earn would still cover the $65 difference between the Gold Star and Executive memberships.
What makes the Executive membership even more appealing is the variety of purchases that qualify for the 2% cashback. This includes everyday essentials like groceries, household items, and even gas at Costco fuel stations.
Over the course of a year, these rewards can accumulate quickly, making the higher upfront cost of the Executive membership a sound investment.
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2. Utilize a Credit Card that Maximizes Costco Purchases
If upgrading to an Executive membership isn’t in the cards for you, leveraging the right credit card for your Costco purchases is another effective strategy.
It’s important to note that Costco only accepts Visa credit cards, so your options are somewhat limited. However, several Visa cards offer substantial cashback rewards on Costco purchases, typically in the range of 2% to 3%.
Let’s break down how this works: If your credit card offers 2% cashback at Costco, you would need to spend about $3,250 annually to cover the cost of a Gold Star membership with your rewards.
The equation changes if you’re an Executive member, as you can effectively “double dip” by earning both the 2% cashback from your credit card and the 2% from your Executive membership.
With this combined 4% cashback rate, you’d only need to spend $3,250 annually to fully cover the cost of your membership.
Selecting the right credit card can therefore play a crucial role in making your Costco membership effectively free. If you’re not currently earning at least 2% cashback on your Costco purchases, you may be missing out on significant savings.
It’s worth taking the time to review the best credit cards for Costco shoppers to ensure you’re getting the most bang for your buck.
3. Take Advantage of Shop Card Promotions
Another strategy for offsetting your Costco membership cost is by earning Shop Cards through specific purchases. A Shop Card is essentially a gift card that you can use at Costco, and there are a variety of ways to earn them, especially through one-time big-ticket purchases.
For instance, many of Costco’s home improvement services offer Shop Cards as a reward for using their services. These Shop Cards often represent 10% of the purchase price, meaning that a $1,300 home improvement purchase could net you a $130 Shop Card—effectively covering the cost of an Executive membership in one fell swoop.
But you don’t need to be a homeowner to benefit from this perk. Costco frequently offers Shop Cards with purchases of large items like appliances, electronics, furniture, and mattresses.
If you’re already in the market for these types of products, purchasing them at Costco could essentially pay for your membership through the Shop Card you receive.
Additionally, if you haven’t yet signed up for a Costco membership, or if you know someone who hasn’t, it’s worth looking for membership promotions. These are often available online and can be particularly advantageous.
For example, platforms like Groupon sometimes offer Costco membership deals that include a Shop Card as a signup bonus, especially if you agree to auto-renew your membership.
Combining this initial Shop Card with the rewards strategies mentioned above can make your membership virtually free from day one.
Final Thoughts
While the impending increase in Costco membership dues might initially seem like a drawback, it’s clear that with the right strategies, you can offset or even eliminate this cost entirely.
Whether you choose to upgrade to an Executive membership, strategically use a cashback credit card, or take advantage of Shop Card promotions, there are plenty of ways to make your Costco membership work for you.
By being mindful of your spending and leveraging these tips, you can continue to enjoy all the benefits that Costco offers without worrying about the membership fee.