If You Spend $270 a Month at Costco, an Executive Membership Would Pay for Itself

Costco membership fees have been in the headlines recently. The warehouse giant announced that annual fees will increase from Sept. 1, 2024. The basic Costco membership will increase from $60 to $65, and the Executive membership will go up from $120 to $130.

The increase amounts to about $0.40 extra a month (or $0.80 for the Executive membership). As such, there's a good chance the jump won't upset the Costco apple cart too much. Particularly as it's the first price hike in over seven years.

Even so, it's a good time to check in and make sure you're getting value from your Costco fees -- and whether it's worth upgrading to the premium Executive membership.

Is your Costco membership worth it?

It can sometimes be difficult to know how much value you're getting from store memberships. Individual price comparisons are complicated when you factor in store brands, bulk purchases, and different package sizes. And that's before you try to account for extra special offers and deals you will find when you're in the store.

Ordinary membership

In terms of an ordinary membership, the question is whether you're getting $60 (soon to be $65) worth of annual savings. Here are some questions to consider:

• Are you able to make the most of the bulk purchases? If you have a big household, big cupboards, and often cook at home, you'll likely be getting good value from your membership card -- especially if you live near a Costco location.
• Do you buy gas at Costco? Prices vary a lot depending on location, but there's a reason GasBuddy says it was the cheapest place to buy gas five years in a row. Compare prices locally and think about how much gas you use. For some people, the savings at the pump alone will pay for the membership.
• Are there specific products where you know you save big? It might be alcohol, tech items, pharmacy products, the famous rotisserie chicken, or specific family favorites. If you are regularly clocking in with significant savings, you'll likely cover that fee in no time.

Executive membership

There's a fairly straightforward calculation you can do to see if you're getting value from your Executive membership. If you spend more than $3,250 a year (about $270 a month) at Costco, the 2% in rewards will cover the extra $65 in membership fees. That's before you factor in any additional savings and benefits.

To take that calculation a step further, if you spend more than $6,500 a year (about $540 a month) at Costco, including Costco travel spending, you will cover the $130 total membership cost. That's both the Executive and basic membership fees.

There's a $1,000 cap on annual Costco rewards. To hit that cap, you'd have to spend upward of $50,000 a year in the warehouse. After membership prices increase in September, that cap will also increase to $1,250 in potential Costco rewards.

How to get even more value from your Costco membership

If you're a Costco regular, you likely know a lot of ways to get the best value from every visit. Pay attention to the Costco savings book, so you know what is on offer and are able to snag any extra bargains. And don't stop with groceries, Costco has great deals on electronics, gas, travel, pharmacy items, and more.

The way you shop is one thing. But if you're looking to really maximize your Costco benefits, look for ways to stack your rewards. For example, you could combine the benefits of an Executive membership with a cash back app. Then throw in a credit card that pays 2% or more on grocery shopping. Check out our best credit cards for Costco to find the right one for you.

If you add up the rewards from an Executive membership, cash back apps, and the right credit cards, you could be earning more than $4 back on for every $100 you spend. That's before you add up any savings from your actual shopping. Even with the increase in fees, there are a lot of ways you can make a Costco membership pay for itself.