Is the $130 Costco Executive Membership still a good value?

For the first time since 2017, Costco is raising the price of admission to its warehouse stores.

Starting in September, the price of the $60 Gold Star membership at the members-only chain will increase to $65, while the premium $120 Executive Membership will now cost $10 more.

On average, Costco increases its rates every five and a half years. Therefore, customers can expect their bills to remain the same until at least 2030 if the current trend continues.

Should you join Costco and which membership should you choose? Additionally, if you are already a Gold Star member, should you upgrade to the $130 tier?

The Executive Membership on paper appears to be a fantastic deal. For only an extra $65 annually, you can begin receiving 2% cashback on all Costco purchases. When combined with the Costco Anywhere Visa card, which also provides 2% cashback at the wholesale store, you'll receive an impressive 4% cashback on every purchase of a 35-pack of Diet Coke.

But you shouldn't make an impulsive decision about upgrading your membership.

Before making a purchase, it's important to evaluate your spending habits and determine if the item is truly necessary.

How much do you usually spend at Costco?

Determining the value of an Executive membership at Costco depends on the amount of money spent annually.

Determining if the $130 Executive Membership is worth the additional cost is straightforward. Since you receive 2%, you need to spend $3,250 to earn $65 in cash back. At that point, your effective annual membership rate is reduced to $65.

If you spend less than $3,250 at Costco annually, it may be more cost-effective to stick with the $65 Gold Star membership rather than upgrading to the Executive membership's higher annual fee, especially if you're looking to get cash back from the store. If you fall into this category, the no-fee Costco Anywhere Visa card is a better option.

If your annual spending consistently exceeds $3,250, the Executive Membership may be more advantageous for you. Each dollar spent above $3,250 will gradually decrease your annual fee, ultimately resulting in savings over time.

The membership page of Costco features a calculator that allows you to input your monthly spending at the store to determine your expected cash back amount for the year.

The Executive Membership has exclusive perks

The Executive membership provides extra savings on Costco services, including bottled water delivery and pet insurance. Additionally, if you purchase home or auto insurance through Costco, you will receive exclusive benefits such as roadside and lockout assistance.

If you're close to spending $3,250 annually on those services, it may be worth considering membership.

You can test drive the Executive membership.

If you're not satisfied with the difference in cost between a Gold Star and an Executive membership in your first year, Costco guarantees a refund. However, you must visit your local Costco location and have the reimbursement processed at the membership desk to receive your money back.

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