Costco Won't Hike Your Membership Fee... At Least For Now

From groceries to gas to housing, your Costco membership may feel like one of the few things that doesn't cost more today than it did a few years ago. The wholesale giant's membership fee hasn't increased since 2017. And, in spite of headlines to the contrary, Costco's bosses say it will stay the same a while longer.

To be clear, unlike Costco's hot dog and soda combo price (which hasn't changed since the 80s), membership fees won't stay the same forever. Richard Galanti, Costco Chief Financial Officer said fees will rise at some point. The good news is that it won't happen just yet. "It's a question of when, not if," he said on a Q1 earnings call. "But at this juncture, we feel pretty good about what we're doing."

What you need to know about Costco fees

A standard Costco membership costs $60 a year (which works out at $5 a month). If you upgrade to the Executive membership to get reward points and extra savings, you'll pay an extra $60, totaling $120 a year ($10 a month). Membership means you can shop at any Costco store and access bulk savings on a host of products. You can also get low cost deals on gas, travel, auto, insurance, optical, and other services.

Even if Costco does increase prices at some point in 2024, they are unlikely to go up by very much. When the popular shopping club last raised prices six years ago, regular membership only increased by $5. That works out at about $0.42 extra each month, which shouldn't put too much of a hole in your bank account balance.

Is a Costco membership worth it?

One of the biggest attractions of Costco is the bulk savings. So, if you have a large household and will regularly shop at Costco, the annual membership fee will almost certainly pay for itself. Even more so if you can qualify for the Costco Anywhere Visa® Card by Citi which gets you between 1% to 4% cash back on your spending.

But every household is different. If you live alone, you might not be able to squeeze enough value out of those bulk offers. Even if you do have a lot of mouths to feed, if you don't have space to store bulk purchases and aren't close enough to make regular trips, it still might not make sense. I also have a tendency to get over excited by all the bargains, which can cause me to overspend.

Price wise, it depends on what you buy. Some items are definitely cheaper in Costco, while low-cost supermarkets like Aldi give them a run for their money on others. Unfortunately, doing a true price comparison for the products you buy regularly can be time consuming. Partly because in-store prices often differ from the ones listed online, so you'll need to physically go to the store to know for sure. Plus, you'll find extra deals and savings when you're walking the aisles.

One CNET article compared a year's worth of shopping at Costco with the same at Stop & Shop. It estimated you'd save over $1,000 by buying in bulk. But, given Stop & Shop's prices, that doesn't tell you much about potential savings. Try using a price comparison app or keeping a note of prices while you're shopping. That way you can make a call on what is the best value for your household.

Can I reduce my membership fee?

Costco says it doesn't discount membership fees. However, you can use certain coupon sites to get a deal if you're a new customer. For example, right now Groupon will give you a $40 Costco Shop card when you buy a new $60 membership.

If you're not sure about spending $60 upfront or will only shop at Costco a few times a year, there are a few ways you can shop there without being a member. These include:

• Use a Costco Shop card: If you know someone who is a member, they can buy you a Costco Shop Card and you can pay them back for the cost. You'll be able to enter the warehouse using the card.
• Go with a friend: I have a friend who kindly takes me on the occasional Costco trip because it isn't worth me joining up. The only snag is that he, as the member, has to pay at the till. I pay him back afterward. I also buy him a hot dog on the way out as a thank you.
• Shop online: This is the least appealing way to shop as a non-member because you pay a 5% surcharge for online shopping. Nonetheless, it can work for a one-off shop.

Bottom line

It's great news that Costco's membership fee won't increase in the near future. But whatever it costs, think about whether it represents good value for you and your personal finances. There's no point spending $60 (or more) if you're only going to shop there twice a year and save $20 in total. If you're a Costco devotee who can't get enough Kirkland in your life, you'll likely make up any membership fee increase in no time at all.