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More than half of Costco members have the costlier Executive membership. Find out why it may make financial sense for you. [[{“value”:”
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Starting Sept. 1, 2024, shopping at Costco is going to get more expensive. Rates for both membership tiers will increase — it will cost $65 a year for a Gold Star membership and $130 a year for an Executive membership.
When Costco announced the increase, it also gave us some interesting information, such as that there are roughly 52 million current members. Perhaps more interesting is that “a little over half” of memberships are Executive memberships.
Given that Executive memberships cost twice as much as a regular Gold Star membership, why have so many people upgraded? There are two main advantages to an Executive upgrade — though most members are likely inspired more by the first than the second.
1. The 2% Costco Reward
Arguably the main reason to upgrade to an Executive membership is the 2% Costco Reward. Executive members earn 2% back on their Costco purchases, including at costco.com and Costco Travel.
Here’s what 2% back could look like based on your Costco spending:
Your 2% back is paid out as a lump sum Reward once per year. You can use the Reward toward Costco purchases, including toward your annual membership fee. The 2% Reward is capped at $1,250 (as of Sept. 1) per year.
Pro-tip: The 2% back you earn is separate from any other coupons or rewards. So make sure you stack it with a good rewards card for Costco to maximize your return.
2. Discounts on Costco services
Costco offers a variety of services beyond the stock on its regular warehouse shelves. This includes everything from pet and home insurance to garage door or closet installation.
All members have access to these services — and some general discounts — but Executive members often receive extra perks. Here are just a few examples:
$15 enrollment fee waived for Fido pet insurance through CostcoComplimentary roadside assistance with auto insurance through CostcoComplimentary home window repair/replacement with home insurance through CostcoNo application or statement fees on payment processing services through Costco
Just to be clear, insurance-related benefits kick in only when you purchase your policy while logged into your Costco account and using the links from Costco’s services pages. You can’t just apply them to your existing outside insurance.
Bonus reason No. 3: No more asking you to upgrade
Alright, so this one is a bit tongue-in-cheek, but it definitely could be a factor for many people: Once you upgrade your membership, the workers at checkout will stop asking (occasionally demanding?!) you to upgrade.
You can now check out in (relative) peace. Enjoy the serenity.
Is an Executive upgrade worth it for you?
While the various extra discounts on services could be handy for some members, the majority of folks are upgrading to Executive for the 2% Reward. So, to figure out if an upgrade is right for you, all it takes is looking at how much you spend at Costco every year.
As the table above shows, you need to spend $3,250 a year to get $65 back. You’d need to spend $8,250 during the year to get $135 back.
In other words, an annual spend of $3,250 would pay for the upgrade to Executive from Gold Star. If you spend more than this each year at Costco, then an upgrade could be a good move for your budget. If not, then keep your Gold Star membership (assuming you’re getting value from it).
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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Brittney Myers has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and JPMorgan Chase. The Motley Fool has a disclosure policy.
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