Should You Upgrade Your Costco Membership to an Executive Membership?

Should you upgrade your Costco membership to an Executive Membership?

The most obvious benefit of an Executive membership is that you receive 2% back on your purchases. This comes in the form of a Costco gift card, not cash. So simple math shows that you need to spend more than $200/month to break even on the extra $50 cost of an Executive membership.

If you don't spend that amount, don't rule it out just yet. There are a few other benefits of Executive membership.

If you have a small business and live in either California, Hawaii, Nevada, Oregon or Washington, your business can obtain health, dental, and life insurance for your employees through Costco. You must be an Executive member in order to use The Small Business Health and Dental Insurance Program. Since I have a small business, and live in one of those states, I did an application to find out what the rates would be. The health insurance cost more than the individual plan I currently have, and the dental insurance was comparable to other quotes (which I do not have). So this program would not be a benefit to me. If I needed it, it wouldn't take much for it to be worth a $50 upgrade to Executive Membership, however.

The last thing to check is additional savings for other member services. Costco offers several good deals to members, which are listed on their website under "services". For example, I buy the pre-paid DHL overnight shipping envelopes. Regular members pay $12.08 for what costs an Executive Member $11.47. This would save me about 50 cents per month. I use Quickbooks Payroll services, which also has a savings for Executive Members. This time, the savings are about $2/month. There are many such offers. For current details, and to see all of them, check the Costco website.

These small savings could add up, but the big rebates are in the big ticket items: auto-purchase, mortgage, and real estate service links. However, unless you are refinancing every year (in which case you have more important financial concerns than a $50 upgrade) they will not tip the scales on the decision to upgrade to an Executive Membership.