Should You Upgrade to a Costco Executive Membership During the Holidays?

When it comes to your Costco membership, you have choices. For $60 a year, you can maintain a basic membership that gives you access to Costco's everyday low prices in stores and online. But if you're willing to spend an extra $60, or $120 in total, then you can get an Executive membership instead. And the primary benefit there is being able to score 2% cash back on your Costco purchases, whether you make them at your local warehouse club store or online.

If you've been on the fence about a Costco membership upgrade, then you may be thinking you'll just wait until the new year to make that change. But if you expect to do a lot of holiday shopping at Costco, then it pays to move forward with that upgrade ASAP.

You might as well upgrade before you do a load of shopping

Costco really has the potential to be your one-stop shop for holiday purchases. After all, you'll find everything from food for your holiday party to gifts to wrapping paper to decor. You might free up cash to add to your savings account by buying these items at Costco, thanks to the warehouse club giant's competitive prices.

If you expect to do a lot of holiday shopping at Costco, then it pays to upgrade to the Executive membership now rather than wait. That way, all of those extra purchases will count toward your cash back total.

Plus, a lot of people tend to take advantage of retailers' Black Friday specials -- and Costco is going to have plenty of those. It's already released some of its Black Friday deals, so customers can get a preview. 

Meanwhile, let's say you're planning to treat yourself to a new TV from Costco during its Black Friday event. That might easily be a $700 or $800 purchase -- or more. Wouldn't you want to earn cash back on it?

There's really no risk in upgrading your Costco membership

It takes $3,000 in annual Costco spending to break even on the cost of a membership upgrade. That's because 2% back on $3,000 is $60, which is the difference between the basic membership and the Executive one. 

Having that upgraded membership in place during the holiday shopping season could make it more likely that you're able to surpass that $3,000 threshold, which is when you really get to benefit financially from an Executive membership. But if you don't end up spending $3,000 at Costco over 12 months, worry not.

Costco wants its members to be happy at all times. So if your Executive membership upgrade doesn't end up paying off, all you need to do is go to customer service and ask to go back to a basic membership. 

From there, Costco will see how much cash back you've accumulated on your Executive membership. If it's less than $60 -- the cost of the upgrade -- Costco will actually give you back the difference. This means that if your total spending only puts $50 back in your pocket, Costco will give you $10 when it downgrades your membership to a basic one.

So all told, upgrading to an Executive membership is a no-risk proposition. And if you do so during the holidays, you might benefit big time.