Is Your Costco Executive Membership Worth It? Here's How to Tell

Years ago, I made the decision to upgrade my basic Costco membership to an executive membership. And I haven't gone back to a regular membership since.

Since I do a lot of shopping at Costco, an executive membership makes sense despite the higher cost, which is $120 versus $60 for a basic membership. But if you're not sure whether your executive membership is worth keeping, then there are two main questions you'll need to ask yourself.

1. Am I getting at least $60 in cash back?

The upside of paying for an executive membership is getting 2% cash back on every Costco purchase you make, including online purchases. You might earn enough cash back for your executive membership to pay for itself. But if you're not earning at least $60 back in Costco cash, then you're basically losing money with an executive membership.

Comb through your Costco spending from the past year and see if it amounted to at least $3,000, 2% of which is $60. That $3,000 in spending represents your breakeven point. If you're spending even just a touch more than that, your executive membership is worth it.

2. Am I benefiting from other executive member perks?

Executive members at Costco get access to other benefits beyond 2% back on their purchases. But if you're not using those benefits and you're not spending enough to make up your extra $60, then an executive membership isn't worth keeping.

If you buy auto insurance through Costco, for example, as an executive member, you can get access to added benefits that include roadside assistance, glass repair reimbursement, and lockout assistance. And if you buy pet insurance through Costco, as an executive member, you're eligible to have your enrollment fee waived.

In some cases, it could be worth it to keep an executive membership even if you're not quite getting your extra $60 back as long as you're using these other benefits. But if not, then it may be time for a downgrade.

Finally, Costco executive members are eligible for a monthly edition of The Costco Connection magazine. Now I'll admit that this isn't a particularly compelling perk for me. But the magazine does tend to feature different offers and information about Costco and its products, which you might find interesting. That said, it certainly doesn't pay to spend money on an executive membership for the sole purpose of getting the magazine.

Don't pay for a service you're not benefiting from

A Costco executive membership absolutely makes sense for me because I spend enough money there during the year to get more than $60 back. And while I don't currently buy my auto or pet insurance through Costco, it's nice to know that the option exists, and that there are potential discounts to be had.

But if you're not getting good value out of your executive membership, there's no reason to pay for it any longer. So if that's the case, go to customer service the next time you stop at Costco and ask to go back to a basic membership. You can do so at any point and get a prorated refund.