If you’re an occasional visitor to Costco, the basic membership might make sense for you. For just $60 a year, it’s a cost-effective way to access your local warehouse club store (or any Costco store, for that matter).
But if you can stomach the $120 fee you have to pay for the Executive membership, it might be worth doing. As of the end of Costco’s last fiscal quarter, the company had 32.3 million paid Executive memberships, according to CFO Richard Galanti. You may want to join these 32.3 million people for the benefits.
You can stand out financially
Costco’s Executive membership comes with a few lesser-known perks, like free membership. Costco Connection magazine every month. But the real benefit of Executive membership is earning 2% cash back on all your purchases at Costco (with limited exceptions).
What this basically means is that if you spend $3,000 a year at Costco, the $60 you get back from that amount will cover the cost of your Executive membership upgrade. And beyond that, every dollar you spend means you’ll gain financially by purchasing the upgrade.
At first, $3,000 may seem like a lot to spend. But let’s say you go to Costco once a month and typically spend $250 on groceries and paper goods. What happened? There’s $3000 in there.
Plus, buying a bigger ticket item from Costco can easily get you past the $3,000 threshold. For example, let’s say you normally only spend $200 a month at Costco, but you decide to buy a TV there on Black Friday. If this TV costs $1,000, you’ve saved money on your Executive membership upgrade.
Similarly, you may decide to book a vacation through Costco Travel. If you’re taking your whole family, this alone can easily cost $3,000 or more.
There’s really no risk in upgrading to executive membership
You may avoid having to spend $3,000 at Costco next year when you decide to pay for an executive membership. In this case you are still fine. All you have to do is go to customer service and ask for your membership to be downgraded.
From there you will be able to see how much cash you have earned back. If the total is not at least $60, Costco will refund the difference to you. Really.
So, that being said, signing up for the Executive membership isn’t really risky. The worst thing that can happen is that you spend the extra $60 up front instead of keeping it in your checking account.
Of course if Definitely If you’re confident you won’t come close to spending $3,000 a year at Costco, you can skip the Executive membership—especially if you’ve been a member for years and know exactly how much your annual spending is. But if some part of you is unsure, then you might as well go for the upgrade and see what happens.
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