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Are you thinking of becoming a Costco member? Many Canadians are, and for good reason. Costco is a bulk store that offers pretty decent discounts for buying, well, in bulk. A Costco membership is more than just being able to buy large quantities of chicken breasts or paper towel rolls at a time. 

While the bulk discount aspect of a Costco membership is definitely a perk, especially for families, there are other benefits to being a Costco member as well. You’ll have cheaper rates for pharmacy-related purchases including prescriptions, access to lower gas prices, and some pretty decent discounts on designer brand items when it comes to shoes, clothing, and toys.

Many people agree that the regular Costco membership, the Gold Star membership is worth the annual fee. The real question is: is the Costco Executive Membership worth it? Well, that decision needs to be made on an individual basis, however, in this article, I’m going to help you decide if the Costco Executive Membership is right for you.

Why you should get a Costco membership

Before you figure out if the executive membership is worth it, you may be wondering if a Costco membership is worth it. After all, unlike a traditional grocery store, Costco is a club warehouse and you do need to pay for a membership to shop here. 

As mentioned above, Costco is best known for its bulk groceries and supplies. You’ll find everything from packages of chicken breasts to cartons of orange juice to large packages of toilet paper. On top of groceries and household supplies, Costco also carries electronics such as TVs and cellphones, brand name clothing, and kitchen items such as coffee makers and mixers.

Costco stores also offer several services that members can take advantage of. These additional Costco services include:

  • Costco Gas
  • Costco Travel
  • Costco Pharmacy
  • Costco Optical Centre
  • Costco Photo Services
  • Costco Tire Centre
  • Costco Credit Cards

Thanks to being a club warehouse, Costco can offer all these items and services at a discounted cost to members, allowing you to save on your shopping needs. Whether it’s for everyday essentials or larger one-time or occasional purchases, Costco has a lot to offer its customers.

Costco membership prices and levels

If you are planning on becoming a Costco member, you’ll have the choice to get the Gold Star Membership or the Executive Membership. Here’s a quick breakdown between the two options.

Gold Star Membership

The Costco Gold Star Membership is their basic membership. It costs $60 per year and can include up to two cards within the membership. The second card can be given to a spouse or another family member as long as they are 18 or older and have the same place of residence.

Executive Membership

The Costco Executive Membership is a step up from the Gold Star Membership. It comes with several additional perks, however, the annual fee is $120 per year. Like the Gold Star Membership, you can get a second card for free for a spouse or family member (as long as they live at the same address).

It should also be noted that Costco also offers business memberships. This is meant for people with their own business (you need an HST number to apply) and allows individuals to purchase items for resale. Just like with the personal membership options, the business membership has the regular option as well as an executive option.

Costco Executive Membership Benefits

So, what makes the Costco Executive membership worth twice as much as the Gold Star membership? Well, there are several perks and benefits that come with the executive membership.

2% cash back on purchases

The biggest draw for most consumers to get the Costco Executive Membership is the cash back aspect. All executive members will receive 2% cash back on the majority of their purchases (some items, such as alcohol, are not included in this). While the cash back is a big draw, you’ll want to make sure that, at the very minimum, you make back that $60 extra that you paid for this membership. To do that, you’ll have to spend at least $3,000 per year which is $250 per month.

Granted, this is a normal, if not low, amount for a family to spend on groceries and home supplies. However, if you live alone or if there are just two of you, it might be a stretch. You want to make sure that you are buying what you need and making up that money, not buying on a whim to make up the difference.

Exclusive offers and discounts

Having the Costco executive membership also comes with a few extra offers and discounts. These are usually for services such as insurance, real estate and mortgage programs, and business services such as cheque printing. Of course, these all still come at a cost but there are special discounts for executive members.

Costco Connection Magazine & Costco.ca inserts by mail

This may seem like a silly perk, however, it’s an easy way to keep on top of what Costco is bringing in and has available. Plus, if you know what’s coming then you can make sure that you are one of the first to get it. There’s nothing worse than hearing about a great Costco deal from a friend then going yourself only to realize that you missed it. Getting the Costco Connection Magazine allows you to stay on top of the newest and best deals and offers both in-store and online.

Shopping Online at Costco

Like most retailers nowadays, Costco also offers online shopping. You will need to take a few minutes to create an account with your membership number, but once you are set up you can shop online. You’ll find plenty of different and new products online that aren’t available in-store plus you’ll also be able to take advantage of some of your favourite Costco services such as the photo centre which will let you create custom photobooks or photo gifts from the comfort of your home. Shipping is available to most Canadian residences.

So, is the Costco Executive Membership Worth It?

If you think that you will be a frequent shopper at Costco, then the Costco Executive membership is likely worth it. However, remember that while the intent of Costco is to save money, and you shouldn’t be spending money on random unneeded items just to validate getting the more expensive card. If that’s the case, then the regular Gold Star Membership will do just fine.

How about the Capital One Costco Credit Card?

In case you didn’t know, Costco only accepts Mastercard in Canada. The Capital One Costco Credit Card is a no fee card which has an earn rate of 3% cash back at restaurants, 2% on gas, and 1% on all other purchases. I should note the first $3,000 on other purchases only earns you 0.5% so technically there’s a $15 annual fee baked into the rewards.

The Capital One Costco Credit Card does include price protection for items charged to the card within the last 60 days. You’re insured for price drops up to $100 with a maximum of $500 you can claim per year. There’s also extended warranty which doubles your manufacturer’s warranty up to an additional year. Finally, you also get purchase protection which covers your purchases from theft or damage up to 120 days from the time of your purchase.

One thing that needs to be mentioned about the Capital One Costco Credit Card, you don’t actually earn any extra rewards at Costco with this credit card. You’re almost better off getting a Costco Executive Membership and then paying with one of the best travel credit cards in Canada that happens to be a Mastercard so you maximize the points you earn.

I personally think the best travel credit card to use at Costco is the WestJet RBC World Elite Mastercard since you’ll earn 1.5% in WestJet Dollars on all purchases which is a pretty decent return. This is obviously useful to people who fly WestJet a lot. The card also gives you an annual companion voucher, free checked baggage and a sign up bonus of $250 after your first purchase so it’s a great credit card.

Another card to consider is the PC Financial World Elite Mastercard. You’ll earn 10 PC Optimum points per dollar spent so that works out to a 1% return which is nothing special but you can take advantage of PC Optimum has bonus events where you can redeem your points for extra value. E.g. claim 250,000 points for $400 in value when the normal value is $250.

If you want cash back, consider the BMO Cashback World Elite Mastercard or the Rogers World Elite Mastercard which both earn you 1.5%. Both of those cards are on my list of the best cash back credit cards in Canada so either is a great choice. 

Here’s a full list of the best Costco credit cards in Canada.

A Costco Membership Breakdown: Is the Costco Executive Membership Really Worth It?
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About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi

33 Comments

  1. Avatar Kris on January 27, 2020 at 9:42 PM

    I don’t believe gas counts toward the 2% cash back so your statement “If you buy your gas at Costco as well, you should easily be able to hit that amount which then makes it a good deal.” Is misleading as to how to spend $3,000 annually

    • Avatar Barry Choi on January 27, 2020 at 10:04 PM

      Kris,

      Good catch, I’ve updated my article to remove the reference about spending on gas

      • Avatar gloria on September 2, 2020 at 8:56 AM

        I had no idea that gas at Costco does NOT count towards the 2% !!! Wow.. Costo misleading?

      • Avatar Derrick Wong on September 13, 2020 at 10:49 AM

        Do would actually need to spend $6000 to make up the difference of an Executive card. Not $3000 since the difference between the two are %1.

        • Avatar Barry.Choi on September 13, 2020 at 10:56 AM

          Derrick, you need to factor in the $60 you pay for the gold membership. Executive is $60 more.

          • Avatar Myles on September 22, 2020 at 3:54 PM

            Derrick correctly factored in the $60 cost of the gold card, but the article does not factor in the the 1% cash back with gold.

            With the gold card, you already get 1% or $30 back on $3000 vs 2% or $60 with the executive ($30 difference in cash back vs $60 difference in membership price). For the additional 1% executive discount to add up to the $60 difference in membership price, you indeed must spend $6000/year or $500/month rather than $3000/year or $250/month.

            To put it simply, you must make $6000 in eligible purchases to fully recoup either membership cost with cash back. If you will likely spend that or more, you should definitely get executive. If you are likely to spend under $6000 then it depends on if you can make use of executive coupons or other benefits.



          • Avatar Barry.Choi on September 22, 2020 at 4:03 PM

            Myles,

            My comparison is based on the Canadian Costco membership tiers where you don’t earn any cash back with a gold membership.



          • Avatar Myles on September 22, 2020 at 4:08 PM

            You are correct. No clue why i was under the impression gold had 1%. Have literally thought that for a decade.



          • Avatar Barry.Choi on September 22, 2020 at 4:11 PM

            All good, I had to do a doubletake just to make sure I was correct.



  2. Avatar Louise Pigeau on January 30, 2020 at 10:12 AM

    I use my no-fee Rogers MC which earns 1.75% on all purchases. Since I buy most things at Costco, it’s the best cash-back card for me. However, I do use my Capital One Costco card at gas stations (2%) and restaurants (3%).

    • Avatar Barry Choi on January 30, 2020 at 10:43 AM

      Louise,

      I totally forgot about the Rogers card when I wrote this article. You’re right, that’s the best return you can get when using a Mastercard at Costco. I’m going to update and include it.

  3. Avatar Ian Crawford on January 30, 2020 at 12:00 PM

    One thing you can do to maximize points is buy Costco cash cards from Costco.ca. using your regular credit card. I use my Visa Infinite travel card so get my travel points on every purchase in a round about way. I’m pretty sure you can use any credit card you may have.

    • Avatar Barry Choi on January 31, 2020 at 12:03 AM

      Ian,

      Yes, that’s a great strategy since you can use different cards. I imagine that’s a hassle for most people though.

  4. Avatar Deana Jenne on June 15, 2020 at 3:19 PM

    What about Costco’s City Bank credit card?

    • Avatar Barry.Choi on June 16, 2020 at 7:48 AM

      Hi Deana,

      My post is about the Canadian Costco memberships so I can’t really comment on the Citibank card since it’s a U.S. card.

    • Avatar Mickey on September 14, 2020 at 1:13 AM

      Costco’s Citi bank CC is well worth it. However, only later I found out that this site is only targeting the Canadian Costco and relevant credit cards there. There are numerous sites that provide details & benefits of Costco’s Citi CC and its usage in the US and to use globally. I use one myself along with the executive membership that helps me churn out the max. The best I use that CC is for gas at Costco to get 4% CB & shopping at Costco and costco.com to get a total of 4% CB (combining 2% CB of CC & 2% CB of executive membership).

  5. Avatar Priya on June 29, 2020 at 9:36 AM

    Really helpful post, thanks

  6. Avatar Richard Howell on June 29, 2020 at 10:40 AM

    With a Cosco Executive membership card how does this effect with CAA

    • Avatar Barry.Choi on June 29, 2020 at 1:54 PM

      Hi Richard,

      I’m not sure what you mean by this question.

    • Avatar Lindsay on October 28, 2020 at 1:10 PM

      Quick Question about Costco capital one and executive membership..
      If you have an executive membership and you use your capital 1 credit card to pay,
      Would you essentially earn 3% on your Costco purchase?
      1% from Capital 1 and
      2% from your membership?
      I found your article very informative
      Thanks

      • Avatar Barry Choi on October 28, 2020 at 1:17 PM

        Lindsay,

        Yes, it stacks. But as mentioned in the article, there are other Mastercards that give you a better return than the Capital One Costco Card.

  7. Avatar Karen on July 6, 2020 at 4:50 PM

    Great article, helped me to make the right decision. Thank yo.

  8. Avatar Bryon Gonzales on July 23, 2020 at 11:36 AM

    So i have bad credit!!his it possible to get a costco credit card?

    • Avatar Barry.Choi on July 23, 2020 at 2:26 PM

      Bryon,

      It’s unlikely you’d be approved. You’re better off getting a secured credit card and improving your credit score first.

  9. Avatar Brian on August 25, 2020 at 10:49 AM

    I have the Costco CIti Visa card which gives 2% back on purchases. Is the 2% for the executive in addition to that?

    • Avatar Barry.Choi on August 25, 2020 at 1:56 PM

      Brian,

      As that’s a U.S. Card, I’m not sure. My info is based on Costco in Canada.

  10. Avatar Eugene Monaghan on October 16, 2020 at 7:03 PM

    Do I get extra warranty for hearing aids when I pay for them with the cosco credit card in canada

    • Avatar Barry Choi on October 16, 2020 at 8:54 PM

      Eugene,

      Purchases made with your Capital One Costco Cash Back Credit Card get double the extended warranty up to two additional years.

  11. Avatar Lindsay on October 28, 2020 at 2:24 PM

    Thank you Barry for your reply.
    I noticed you suggest to pay for your Costco purchases with the WestJet credit card or the PC World Elite.
    What other card would you recommend if you do not fit the income requirements for these cards?

    I appreciate your time as I am sure you’re a very busy Dad.

    • Avatar Barry Choi on October 28, 2020 at 3:54 PM

      Lindsay,

      THe PC Mastercard and PC Mastercard have lower income requirements and give you 10 PC Optimum points per $1 spent at Costco so that’s a 1% return. There’s also the Tangerine Money-Back Card but that only gives you 0.5% cash back at Costco.

  12. Avatar Jeanne on November 10, 2020 at 6:38 PM

    Thank you so much for this article. I have been a regular member for several years now, but when I was at Costco today, they asked me if I want to upgrade to the executive card for $15, and they said they’ll give me a coupon for $25 to be used online (valid until Jan 2021). There is something I was going to get anyway through their website, so I agreed. My question now is this…the 2% cash back…will this only be applied on purchases I make moving forward as an executive member, or will it be applied to the total amount I have spent at Costco this year?

    • Avatar Barry Choi on November 11, 2020 at 5:32 AM

      Hi Jeanne,

      I believe it applies from the time you became an executive member.

  13. Avatar john on November 30, 2020 at 3:01 PM

    Here’s a nice hack as told to me by the membership person at my local Costco. If you upgrade to the business card for $120 and after 12 months haven’t spend at least $3,000 thereby justifying the upgrade, simply cancel the card, get your $120 back and downgrade to the regular membership. You can then go back to the business card and rinse and repeat!

    Here’s the kicker. if you have been paid your 2% cashback PRIOR to the card renewing, you might be able to keep the cashback AND get a refund on your annual fee.. making money off the deal!

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