Why I'll Never Downgrade My Costco Executive Membership

It's well worth the extra money to me.

When I first started shopping at Costco, a regular membership sufficed for me. That's because back then, it was just me and my husband, and we didn't rack up the same massive credit card tabs for groceries that we do now. Also, back then, we were on more of a budget, so we didn't have the same leeway to spend on household items and electronics we do these days.

But once we had kids, upgrading to a Costco executive membership started to make financial sense. And at this point, I don't ever see myself going back to a basic membership.

A fee that's more than worth paying

There's a difference in cost between a basic Costco membership and an executive membership. A basic membership, as of now, costs $60 a year. The executive membership costs $120.

It's worth noting that these prices could rise, and soon. Costco has not increased the cost of its membership fees in over five years. So at this point, members are actually due for an increase.

But if Costco raises the price of memberships, the cost of a basic one could increase by a mere $5 a year, and the cost of an executive membership could rise by just $10. These increases would be in line with previous ones. And even then, the executive membership would still make sense for me.

The primary benefit of having an executive membership at Costco is getting 2% back on all Costco purchases. And I make a lot of those.

In fact, once your annual Costco spending reaches $3,000, the executive membership pays for itself. That's because it costs $60 more than a basic one, and 2% back on $3,000 is $60. So if you think you'll spend more than $3,000 at Costco in a given year, the added fee makes sense.

Last year, I spent over $7,000 at Costco. That might seem like a lot of money, but keep in mind that I not only buy groceries there weekly, but I also use Costco as a source of things like holiday gifts and electronics. I also own a small business, and from time to time, I'll find products I need to do my job at Costco at a lower price than I'll find elsewhere.

Now, I may not spend $7,000 at Costco every year. But as long as I spend enough to eke out even a little savings from the executive membership, that added fee will be worth it.

Assess your Costco spending

You might assume that a Costco executive membership isn't necessary for you. But before you make that call, look at your total spending from the past year. You may be surprised to see that you spent enough money to justify the cost of an executive membership.

Of course, if Costco raises its membership fees this year, or in the future, a good bet will be to reassess the need for an upgraded membership. But even if Costco's next fee hike brings the cost of an executive membership up to more than $130, chances are, it will still make plenty of sense for me financially.