Is a Costco Membership Worth It? A CPA’s Take on the Math, the Experience, and the Traps
If you spend time on social media, you’ve probably seen Costco posts everywhere. Bulk groceries, rotisserie chickens, massive jars of olive oil, and crowded parking lots. It can feel like everyone but you is somehow getting a deal.
As a CPA who teaches accounting, I look at decisions like this in two ways: the numbers and the behavior behind them. My household has an Executive membership and uses the Costco Anywhere Visa card, and for us, the math works. That does not mean it works for everyone, but understanding how to evaluate it is critical before signing up or upgrading.
This post will walk you through three things:
Should you even get a Costco membership?
If yes, is Gold Star enough or is Executive worth it?
Common traps and behavioral insights that can destroy potential savings
Step 1: Should You Be a Costco Member at All?
Before considering any upgrade, the first question is simple: is the basic $65 Gold Star membership worth it?
The math is straightforward. You pay $65 per year and get access to:
The Costco warehouse and Costco.com
Two household cards
Gas stations, pharmacy, and other services
To justify the fee, you need to save more than $65 annually through:
Lower per-unit prices on the groceries and household items you actually buy
Occasional big-ticket purchases
Fuel, pharmacy, or other services
For context, my household spends between $3,500 and $5,000 annually on recurring food, groceries, and household items. Even if we ignore rebates, lower unit prices alone justify the base membership.
The Qualitative Side
Costco also offers products you might not easily get elsewhere:
Kirkland Signature quality at private-label pricing
Seasonal or specialty items
Appliances, furniture, and home goods
For example, we purchased our kitchen table and couch through Costco. Delivery, installation, and returns were seamless, which is a level of convenience and peace of mind that matters even if you do not do this every year.
Step 2: Gold Star vs Executive Membership
Once you know the base membership is worth it, the next question is whether upgrading to Executive makes sense.
Executive membership costs $130 per year, essentially a $65 upgrade on top of Gold Star. This comes with:
2 percent annual reward on eligible Costco purchases, up to $1,250 per year
Early access to the warehouse every day
The break-even math is simple: 0.02×"Annual Eligible Spending"=65
This means you need to spend roughly $3,250 per year at Costco to recover the upgrade cost. For our household, which spends $3,500 to $5,000, the Executive membership pays for itself.
Early access is another real benefit. In our area, Costco parking lots are terrible and warehouses are always crowded. Being able to shop before peak hours is more than convenience, it actually improves the shopping experience for me at least.
Step 3: Layering in the Costco Anywhere Visa
Using the Costco Anywhere Visa Card by Citi adds rewards on top of Executive benefits:
5 percent back on Costco gas
4 percent on other eligible gas and EV charging
3 percent on restaurants and travel
2 percent on other Costco purchases
1 percent on all other purchases
When paired with the Executive membership, we effectively get 4 percent back on most Costco purchases, which compounds the value. While this 4 percent specifically helps when calculating the break-even for Executive membership, the card also provides additional benefits on everyday spending and the categories mentioned above, which may be an important factor for some households when choosing a rewards card.
Step 4: Common Traps
Even with all the math in your favor, Costco can lure you into financial mistakes.
1. Bulk Buying Gone Wrong
Check expiration dates. Personally, I buy yogurt every trip. Most of the time, it works fine. Occasionally, I find myself eating the same yogurt flavor for a few days straight right before it expires. If you cannot eat multiples of the same item, bulk buying can backfire.
2. Rotational or Seasonal Items
Costco frequently rotates products. One time, we bought a chicken sausage package that seemed like a great deal. The taste did not work for one household member, and suddenly a portion went unused.
3. Impulse Purchases
Costco is designed to encourage discovery. It is easy to grab items you do not need. Without discipline, your potential savings disappear in unplanned purchases.
4. Overestimating Executive Benefits
Upgrading because “I plan to spend more” is not the same as actually spending enough to reach the $3,250 break-even threshold.
Step 5: Personal Highlights
Two things I genuinely value from Costco:
Predictable Pricing on Yogurt – Every time I buy the large packs, it costs about the same per cup, usually less than $1 each. Compared to the grocery store, where the same yogurt can vary wildly in flavor, size, and price, this consistency is huge for me. It removes the uncertainty that drives frustration when shopping elsewhere.
Big-Ticket Items and Customer Service – When we bought furniture, everything from delivery to setup to returns went smoothly. Even when we had an unusual issue with a printer infested with ants months after purchase, Costco handled it without hassle. Most other stores would not have been nearly as accommodating.
Step 6: Making the Decision
Here is a simple framework for anyone considering Costco:
Estimate your annual household spend at Costco.
Compare unit prices on the items you buy regularly.
Multiply the per-unit savings by your yearly consumption.
Check if that exceeds $65 for the Gold Star membership.
If yes, see if your annual spending exceeds $3,250 for Executive.
For my household, all the numbers align, and the behavior matches the assumptions. We buy consistently, check expiration dates, and purchase enough to make the rebate meaningful. For someone who shops occasionally or buys in small quantities, the answer may be different.
Final Thoughts
Costco is not automatically a good deal. It is worth it when:
Your behavior aligns with bulk shopping and consistent consumption
You regularly purchase items that make the base membership or Executive upgrade pay off
You can leverage qualitative benefits like early access, big-ticket items, and consistent product quality
Ultimately, the spreadsheet is only half of the story. The other half is awareness, discipline, and understanding of how your household operates. That is the difference between saving hundreds of dollars and thinking you are getting a deal while your cart empties your wallet.