4 Signs a Costco Membership Will Work Out Better for You Than Sam's Club

Sam's Club and Costco both provide the chance to get great deals on household items, electronics, and more. Shopping at the warehouse clubs should allow you to keep more money in your checking account when buying necessities and luxuries -- especially if you're a smart shopper.

For most people, though, it only makes sense to be a member of one warehouse club, not both. Deciding between them can be complicated, so watch for these four signs that you're better off with a Costco membership. 

1. You're OK with paying a little more upfront for your membership

Costco membership costs $60 for a Gold Star membership, which is the entry-level option and the cheapest club membership available. You can also opt to be an Executive member, which comes with extra perks (more on those below). The total fee for an Executive membership is $120 a year. 

Sam's Club is a little cheaper. The entry-level Club membership is $50 annually and the upgraded Plus membership is $110. Sam's is also much more likely than Costco to offer discounted memberships throughout the year. 

If you're OK with paying a little bit more upfront, then a Costco membership is worth considering. But if your goal is just to get into a warehouse club for a rock-bottom price, you're more likely to be happy as a Sam's customer. 

2. You want to maximize your cash back

Sam's Club and Costco offer the chance to earn cash back if you choose the upgraded membership. With the Plus membership at Sam's, you can earn 2% back on qualifying purchases made at the warehouse club -- but only up to $500 in cash back. Costco also offers 2% back if you have the Executive membership, but you can earn up to $1,000 cash back. If you want to earn the most cash back possible, a Costco membership is definitely the best option.

3. You want more locations to visit

There are close to 600 Sam's Club stores across the United States and Puerto Rico, but Costco has significantly more locations -- 871 as of November 2023. 

If you only shop at your home store, then you'd likely want to pick whichever warehouse club is nearest to where you live -- which could be either Costco or Sam's. But if you want to maximize the chances of having a warehouse club near wherever you happen to be -- including at work, when traveling, or when visiting friends, then you'd be better off with Costco due to the higher number of stores.

4. You want discounted insurance coverage

Costco offers discounted auto and home insurance through its partnership with American Family Insurance. Costco indicates members saved an average of $595.86 on their car insurance after switching coverage. Sam's Club does not offer discounted insurance or have a partnership with insurers. So anyone looking to save on this product should opt for a Costco membership. 

By considering these four big issues, you can make a better, more informed choice about which warehouse club is right for you and your finances.