Is Costco worth it? Find out now

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Normally when people do their shopping they expect to not have to pay just to do so. Well warehouse stores like Sam’s Club, BJ’s Warehouse and Costco beg to differ and charge annual membership fees ranging from $45 to $110 per year for the privilege.  While there are a number of large nationwide warehouse chains I am going to focus on the largest, Costco and attempt to answer the question is Costco worth it?.

Before I get started I would like to preface that I have also been a member of both Sam’s Club and BJ’s Warehouse and am currently only enrolled in Costco’s program.

Membership Fees & Benefits

One of the main reasons people ask if is Costco worth it is the annual membership fees you are required to pay in-order to shop. With nearly 700 locations Costco has the highest annual memberships fees of it’s warehouse competitors starting at $55 per year. The lowest cost is for their standard Gold Star and Business memberships. They also have an Executive program for high-volume consumers at $110 per year. This program offers an annual 2% rebate as well as increased savings on their various programs such as Travel. To justify the additional $55 premium, you need to spend a minimum of $2,750 each year at Costco alone to break even with the 2% rebate reward benefit portion.

One of Costco’s many programs is a travel portal ( that members can utilize for booking vacations. These getaways range from specialized destination packages, to cruises, and even rental cars. Executive level members are eligible for increased savings and benefits on respective bookings. As we continue through the article I will explain how you can justify the cost of either membership and even save money in the end. If you enjoy cruising and want to learn how you can receive bonus credits for spending while on-board, then check out our article “The key to cheaper cruises!”.

What can you buy at Costco?

Costco Programs

Costco sells almost everything you could imagine whether in-store or online. They do however offer fewer variations and brand options compared to large super-centers like Walmart. Costco at any one point will have around 4000 products available for sale compared to nearly 100,000 of Walmart. Why you may ask? Well by keeping the selection of goods to just a few brands or varieties they can secure a better volume price for their members. For example, Costco may sell a single version or brand of coffee maker, this exclusive spot will be then battled for by the manufactures thus driving the final price down for shoppers. Additionally, Costco on average only marks up their products by about 15% compared to competitors.

Obviously one of the drawbacks with this tactic is not having the luxury of choice when making a purchase. If you have preferences for specific brands you may be out of luck. However, in my experiences Costco does a pretty good job in their brand and model selections. Additionally, Costco will normally have special versions of products manufactured for members that include bonus items or quantities.

What I do and don’t buy at Costco

When it comes to my grocery list I spread out purchases across various online shopping websites (see our article “Stop spending $4,000 on groceries. Learn how to save 15% or more!”), local grocery stores and big box stores like Target. Here are some of the items I always buy at Costco

  • Fresh Organic Chicken – 3 x Packs ($5.99/lb)
  • Fresh Fish
  • Fresh Organic Spinach Bins
  • Frozen Organic Fruits & Vegetables
  • Herbs and Spices
  • Organic Cooking Oils: Extra Virgin Olive Oil & Coconut Oil
  • Organic Pasta
  • Canned Tuna
  • Organic Coconut Water
  • Organic Brown Rice
  • Various Chips & Dips
  • Bottles of Wine, Rum, Tequila and Vodka
  • Organic Trail Mixes (has to have chocolate)
  • Organic Protein Powder
  • Pharmacy Prescriptions

In addition to my grocery items I also have started shopping for clothing, shoes, kitchenware, and various seasonal items like Christmas trees when available! A secret that many people may not know about Costco is that a number of the off-brands you encounter while shopping are actually made by well-known manufactures. A few examples that I am aware of are:

  • Clothing: Urban Star Jeans are made by same manufacture of Lucky Brand Jeans
  • Kirkland brand Rum is made by the same producers of Sailor Jerry Rum
  • Kirkland brand Vodka is allegedly made by Grey Goose
  • Costco Gasoline is provided by the BP brand

Costco Gas CompetitorsSpeaking of gasoline, I will always try to time my Costco trips for when I need gas. The gas stations when available are always close to $.10 cheaper per gallon then local competitors, sometimes more (see the comparison to a nearby station). To put the savings into perspective, the average US household spends around $1,962 per year on gasoline. If you saved $.10 per gallon and filled up for an entire year at participating Costco gas stations versus local stations, you would easily pay for your membership fees and some. Even if you had the Executive membership and filled up two cars you would still break even plus some.

The Pharmacy & Vision Center

Another gem that people tend to overlook at Costco are the Pharmacy and Vision Centers. The Pharmacy prices hands-down beat Walmart and Target price’s pretty much every time. The Vision Center is also on par with the Pharmacy in it’s deep discounts versus other retailers especially with frame and lens purchases.

The Costco Credit Card

One of the ways in which I maximize my cash back rewards is through the Costco sponsored credit card. Until recently the affiliated card was provided by American Express but, by June 2016 the new provider will be Citi under the Visa brand. Here are the newest benefits when applying for the Costco Credit Card:

Benefit Categories

Costco Cash Back %

Gasoline Purchases:

(first $7,000)


Restaurant & Travel Purchases:


Costco Purchases:


(new category)

All Other Purchases:



These rewards are paid back annually after the first statement cycle of each new year in cash! There are very few credit cards that come close to comparing to the Costco’s let alone with the range of purchase types offered.

Costco Auto Program

The final program we will cover is the Auto Program which provides members receive with both exclusive savings as well as an improved buying experience on new and certified used vehicles. Members who purchase through the Costco affiliated dealer network gain access to member-only pricing sheets not available to the general public. In addition to the special rates Costco ensures the buying process is more streamlined and less stressful when compared to the typical experience. The available discounts and savings will vary depending on the vehicle you select. Here is an example of an on-site promotion for the new 2016 Chevrolet Silverado 1500 LTZ Crew Cab (4WD Black):


Want to learn how to get the best pricing when purchasing a new vehicle? Check out our exclusive Ultimate Car Buying Savings Guide!.

What I don’t buy at Costco

Among all the products and services I purchase at Costco there are still a few items that I will not buy due to pricing. As you can see from the list mentioned above I try to buy organic products when possible. While Costco over the years has steadily increased their organic selection, when it comes to finding fresh organic fruits and vegetables I tend to go to local farmer grocery stores as their is more of a selection. Other items that have been historically proven to be more expensive at Costco include paper goods like paper towels, toilet paper and cleaning detergents for the laundry and dish washing machines.

So is Costco Worth it?

You be the judge, here are my savings for an average year:

Costco Membership Costs & Savings


Executive Annual Membership Fees:


Gas Savings:

$10/month or $120/year

Credit Card Rewards:


Executive 2% Cash Back Rewards:



$302+ Per Year

Yes it is.

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