KEY POINTS
- The cost of an Executive membership at Costco is twice the price of a basic membership.
- If you are a frequent Costco shopper like me, paying a higher fee can be justified as you receive cash back rewards.
- The Executive membership at Costco remains a safe investment option, regardless of any alterations in my spending habits.
When I initially became a part of Costco I didn’t have children at that time, so I wasn’t spending as much on groceries as I do now. However, when my family’s grocery expenses increased, I upgraded to an Executive membership and have continued with it ever since.
Actually, there is hardly anything that can persuade me to relinquish my Executive membership, even with the increased price. Let me explain why.
An increased fee that is justified to pay.
Currently, a Gold Star membership at Costco is priced at $60 per year, and an Executive membership costs $120. However, beginning on September 1, the price of a Gold Star membership will increase to $65, and an Executive membership will be priced at $130. In any case, the cost of an Executive membership will be twice that of a Gold Star membership.
However, the Executive membership offers a significant benefit – a 2% perk. cash back When you buy items, it is advisable to opt for the more expensive membership at Costco, especially if you are a frequent shopper like me.
I typically go to Costco once a week and usually spend a minimum of $100. This is the amount needed to provide food for a family of five and purchase essential items such as paper towels, tissues, and cleaning products.
I often rely on Costco for specific occasional buys, like getting new autumn coats for my children or purchasing gift sets for my kids’ teachers around the festive season. This additional expenditure, combined with my usual weekly spending, helps me quickly recover the expense of upgrading to an Executive membership and even leaves me with some extra cash in hand.
Currently, spending $3,000 per year at Costco is necessary to recoup the expense of upgrading to the Executive membership. After the store raises its fees, customers will need to spend $3,250 to break even on the membership upgrade.
Given that I usually spend more than $5,000 annually at Costco, it is clear that the Executive membership is a financially beneficial choice for me. With $5,000 in purchases, I can receive $100 in cash back. This amount covers the $65 upgrade fee and provides me with additional savings.
I will continue to maintain the Executive membership at Costco even if I start spending less there.
At some stage, I might not be visiting Costco weekly to purchase groceries and supplies. However, it still makes sense to maintain the Executive membership for one significant reason – You can be certain that you will not lose any money on it.
If you purchase the higher-tier membership and do not earn back sufficient cash rewards to cover the additional fee, Costco permits you to revert to a lower membership level and receive a refund for the excess amount. For instance, if you opt for the pricier membership but only accumulate $52 in cash back while the upgrade cost you $65, you can switch to a standard membership for the following year, and Costco will reimburse you the $13 difference from your upgrade fee that you did not recover.
I will not cancel my Executive membership for this very reason. If you have been using a regular membership, you should think about upgrading. Instead of assuming you won’t recoup the cost of the upgrade, look at how much you spend at Costco each year. You might be amazed by the final amount.
Moreover, it is advisable not to immediately cancel your Executive membership if your household circumstances shift. While you may reduce your grocery expenses after your children have left home, there is a possibility that you might end up spending more on various items at Costco.
There is a benefit in maintaining the premium membership and observing the outcome. In any case, you are assured that you will not lose any money.
