The Costco Executive Membership costs twice as much as the regular Gold Star membership. We’re talking $130 instead of $65 each year. That’s a big increase, especially after Costco just raised their membership fees! But the $65 question is, of course, is it worth forking over those additional dollars for the Executive membership instead of the Gold?
Well, according to Costco’s latest sales report, “a little over half” of US members in Costco have Executive memberships. A for good reason. If you’re already a Costco fan and you feel like you’re receiving killer value, you’re likely to get even more mileage from spending the extra money to unlock the expanded executive membership benefits. The ROI for that extra $65 is pretty high — and we’ll explain the math below.
That being said, if you rarely buy in bulk, don’t live near a Costco, or have a small monthly spend, you may find that sticking with the Gold Star membership, or maybe even ditching your membership altogether, makes the most sense. Costco isn’t for everyone, and that’s OK too!
Gold Star vs. Executive Memberships
Both the Gold Star and the Executive memberships include tons of money saving perks! Here is a breakdown of what each membership tier includes:
| Gold Star Membership | Executive Membership |
|---|---|
| $65 Per Year | $130 per year |
| No annual 2% reward | Annual 2% reward up to $1,250 |
| No Costco Services Discounts | Costco Services Discounts |
| Shop online and in store | Shop online and in store |
| 2 membership cards per household | 2 membership cards per household |
| 100% satisfaction guarantee | 100% satisfaction guarantee |
As you can see, while both cards offer major savings both online and in warehouse, the Executive membership comes with some exclusive perks- we’ll break those down below!
Costco Executive Membership Benefits:
There are three main benefits of having a Costco Executive Membership. Here they are, along with the potential value you get in return for the higher membership cost:
1. Annual 2% Reward Credit
By far the biggest perk of upgrading to Executive is the additional 2% reward on almost everything you buy. The value of this perk increases with each additional dollar you spend. Costco high rollers incur the highest reward for spending, while small-time spenders won’t benefit nearly as much.
Here’s a quick math table showing how much you’ll earn depending on your annual Costco spend…
| Average Monthly Spend | Annual Spend | Annual 2% Reward |
|---|---|---|
| $100 | $1,200 | $24 |
| $200 | $2,400 | $48 |
| $271 | $3,250 | $65 **BREAK-EVEN POINT** |
| $400 | $4,800 | $96 |
| $500 | $6,000 | $120 |
As you can see, the break even point for paying the extra $65 for the Costco Executive membership is right at the $271 per month mark. So if you spend more than $3,250 per year at Costco (most people do), the executive membership pays for itself. Every additional dollar above that amount means that higher tier membership is even more financially effective.
So, will you spend over $3,250 a year at Costco?
Well, studies find the average Costco member spends around $100 per visit, and visits an average of 30 times per year. So for most families, spending almost $3,000 (about $250 a month) is actually quite easy to achieve. This is right below the break even point, so while many shoppers will be below this spend, many will also hit this spend with ease.
For you heavy shoppers: The 2% reward for Executive Members is capped at $1,250. But don’t worry, it would take spending over $63,000 there to hit that max. (If you do spend that much, please reach out to us – we’d love to interview you on the podcast and hear about your crazy shopping trips!!)
Another important note: Some items and services don’t qualify for the 2% reward. These are Costco Gas, gift cards, postage stamps, tobacco products, and alcohol (in most states).
How the 2% reward works:
Every year, a couple months before your renewal date, Costco will mail you a reward certificate based on your spending that year.
You then just take that certificate with you on your next Costco shopping trip, and have the credit applied to your total at the checkout.
Also, at any point within the year, the primary member of a Costco executive membership can log into their Costco.com account and check their 2% reward estimate. It shows on the Account Details screen under Membership Information. Here’s a screenshot:
As always, you can get a full refund on your membership (yes, even the more expensive Costco Executive membership) if you aren’t completely satisfied. The 100% satisfaction guarantee policy at Costco really can’t be beaten!
2. Costco Travel Discounts
One of Costco’s best kept secrets is its in house travel agency, Costco Travel. Any member can book flights, hotels, rental cars or even full vacation packages via Costco Travel. And also for Executive Members, the 2% Reward applies to most travel purchases too!
A friend of mine books an all-inclusive 7-day cruise each summer for his family of 4. It costs between $2,500 to $3,500 depending on the destinations, and they LOVE how simple it is. Many vacation packages come with bonus Costco Shop Cards, in addition to the 2% Reward on the entire package.
Needless to say, if you’re a regular traveler, or book vacations through Costco Travel, it’s usually worth it to have an Executive Membership.
Ps. Costco members can also book travel for non-Costco members, whether you are traveling with them or not. So if you have friends that are not Costco members, they can still benefit from Costco travel packages and discounts. You just book the travel under your Costco Travel login, and they can pay with their credit card.
3. Value Beyond the Warehouse
The last perk of Costco Executive Membership is access to greater discounts and benefits on Costco Services.
Costco partners with a bunch of providers to offer insurance, home services, auto, and even small business services. While not every service is a perfect fit, it’s definitely worth browsing through the available offers and available discounts.
Some of the most used Costco Services include:
- Auto/home/life Insurance
- Pet Insurance
- Home Installation & Improvement
- Payment Processing (for businesses)
- Costco Auto Program
Again, these services can be hit or miss, because cheaper alternatives might be found elsewhere. We always encourage folks to shop around. It never hurts to compare quotes and check out all the available options.
Costco Anywhere Visa® Card by Citi – A No-Brainer!
It doesn’t matter which membership tier you hold, ALL Costco shoppers should probably get the card_name. It has no annual fee, and gives you additional cashback opportunities every time you buy stuff. (yep, this is cash back on top of the 2% reward for executive members)
Here are the cash back categories and rewards:
- 4% cash back on Costco Gas and EV Charging
- 3% cash back on restaurants & eligible travel
- 2% cash back on all Costco and Costco.com purchases
- 1% discount on all other stuff
I’ve held this credit card for years. It costs me nothing in fees, and I pretty much use it exclusively for my shopping at Costco. Here are the other credit cards in my wallet, and I also talk about the best ways to maximize rewards points!
The Bottom Line
If you’re already receiving great value from Costco, chances are you’ll benefit from the upgrade to a Costco Executive membership. Spending over $271 per month is what it takes for the higher membership fee to pay for itself in rewards. Anything over that is a bonus!
The people who crush it the most though, are those that hold BOTH the Costco Executive membership and the Costco Anywhere VISA credit card. The rewards stack on top of each other, giving you the biggest discounts, savings and also bragging rights. 😉
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Did you receive any compensation from Costco for this article?
Nope, that would be nice though! lol. We’re just big Costco fans, so we write about what we like and think will help others 🙂
Agree, quite misleading to push for Costco CC and executive card. Instead use new bonus credit cards to shop at Costco (Mastercard not accepted) and you get much better returns.
Ignorant comment. As an Executive member, I get back much more on my annual reward certificate than the cost of the membership. Also, the Citibank credit card has no annual fee for Executive members and my Citibank reward last year was over $1800 (that’s over and above the Executive member reward). I’m not aware of any other credit cards that pay 4% on all gas purchases, 3% for restaurant and travel purchases, 2% on all our Costco purchases and 1% everywhere else with no annual fee.
I agree that the executive membership aligns with members that exceeds the amount of breakeven. However, the Citi card isn’t a must. For example, some people would prefer using the Chase Ink Unlimited card that gives 1.5% on all purchases. Sure, it’s less than 2% but if you travel and utilize Hyatt hotels a lot, that 1.5 value translates to 3 or more. I’m sure there are other examples. The Citi custom cash card can be used for the gas purchases only and that will net 5% back. Then you can use another card for restaurants specifically (eg, AMEX gold card which gives 4% back).
I am not a member, but I love the 10 Ways to Slash Your Grocery Bill, tip.
Thank you for making it public and not just for members.