3 Expensive Costco Traps to Avoid

Shopping at Costco should, in theory, help you keep more money in your bank account since the warehouse club offers bulk deals. In reality, however, many club members find themselves falling into Costco traps that lead to them running up their credit card bills.

You could find yourself wasting your hard-earned cash if you make any of these big errors. The good news is, if you know what they are, they're easy to avoid.

1. Choosing the wrong membership tier

Buying the wrong membership tier is the first trap you might fall into, and you could make this mistake even before you become a club member. See, there are two different levels of membership:

• Executive membership which costs $120 a year
• Gold Star membership which costs $60 a year

The Executive membership comes with some tempting added perks -- most notably, 2% cash back on purchases up to a maximum of $1,000 a year. But, it's not right for everyone. If you don't spend at least $3,000 a year at the warehouse club (or take advantage of other special exclusive Executive membership discounts like extra discounts on Costco services), then the Executive membership isn't worth it.

On the other hand, if you spend more than $3,000, trying to save money by going for the Gold Star membership is short-sighted because you'd cover the cost of your membership and get extra cash back on top of that.

To avoid this trap, think carefully about how much you'll be spending and make the choice that makes the most financial sense for your Costco spending habits.

2. Paying the online surcharge

While shopping online may seem more convenient, buying online at Costco.com can be a lot more expensive than visiting your local warehouse club. The price difference can be substantial, with even grocery items often costing a few dollars more per item when purchased online for pickup or delivery versus buying them in-store.

As annoying as it may be (at least to those of us who love online shopping), if you aren't going to go visit your local warehouse club to do the bulk of your shopping, a Costco membership just isn't going to offer you the rock-bottom prices you might be hoping for.

Don't fall into the trap of just clicking and purchasing. Instead, aim to visit your local club around once or twice a month to buy everything you need. As a bonus, you can fill up on gas while you're there to take advantage of low fuel prices.

3. Buying items you won't use up

Costco is known for being great for bulk buys, but that's useful to you only if you use all of the items you're purchasing. If you buy 10 pounds of pancake mix for $9.99, but you later realize you don't own an iHop and use only five pounds of it before it goes bad, you'd have been better off with the $7.12 five-pound bag of the same stuff from Walmart.

Fortunately, you can avoid each of these three big traps if you're smart about what you buy, where you shop, and what membership tier is right for you.