3 Little-Known Drawbacks of a Costco Executive Membership

One of the best personal finance decisions I've ever made in the context of shopping was to upgrade my basic Costco membership to an Executive membership. These days, I pay $120 a year for a Costco Executive membership. That's double the cost of a basic membership. 

However, my Executive membership gives me 2% cash back on my Costco purchases. And since I shop at Costco frequently, it's common for me to rack up more than $100 in cash back from that membership per year. As such, the extra $60 fee more than pays for itself.

But while I appreciate having an Executive membership at Costco, there are certain pitfalls you might encounter if you decide to upgrade. Here are some less obvious drawbacks to be aware of.

1. Your Executive membership might tempt you to spend more

The danger of chasing a credit card sign-up bonus is that you might end up spending more money for the express purpose of meeting a threshold that entitles you to a perk like free cash or air miles. Similarly, if you upgrade to Costco's Executive membership, you may find that you're more tempted to buy extra things so you can score a higher reward certificate at the end of your membership year. 

Of course, you could always try to train your brain not to do that. But also, a part of you might go, "Well, I wasn't planning to blow $20 on a fleece sweatshirt I really don't need, but I get 2% back, so…" 

There lies the danger. And you don't want your Executive membership to lead to excessive spending that hurts you financially.

2. Certain purchases don’t qualify for cash back

The Costco Executive membership gives you 2% cash back on most purchases. But it doesn't give you cash back on all purchases. Some of the things you won't get cash back on are:

• Gas fill-ups
• Cigarettes
• Tobacco
• Alcohol (depending on your state)
• Stamps
• Food court purchases 

Now, perhaps some of these products aren't things you buy anyway. But not being eligible for cash back on gas fill-ups, for example, is a huge bummer. I almost always try to fill up my car in conjunction with a Costco run to save big at the pump, since Costco's gas prices are lower than most stations in my town. 

3. You no longer get early access to stores

There was a point in time many years ago when a Costco Executive membership gave you early access to your local warehouse club store. Not anymore. Costco did away with that benefit ages ago, but I really miss it.

I'm someone who doesn't like crowds. The one negative of shopping at Costco in my book is that it tends to be full of people -- even when you go at what seems like a random hour during the day. So I miss being able to shop at a time when the store was a bit emptier.

That said, I've found that Costco tends to be less busy in the evening. So if you happen to be free at that time, you might benefit from fewer crowds.

I love my Costco Executive membership and can't imagine downgrading to a basic one. If you're thinking about upgrading your membership, it may be a move that serves you well. But do be aware of these drawbacks before moving forward.