Money Management

Should you spring for an upgraded Costco membership? Read on for some surprising facts about the Executive option. [[{“value”:”

If you’re joining Costco, you have a choice. You could pay $65 a year for a basic Gold Star membership that lets you shop at the warehouse club. Or, you could upgrade to the Executive membership at a cost of $130 per year. In exchange for the extra $65 an Executive membership costs, you get to earn 2% cash back on your Costco purchases.

You may be on the fence about buying Costco’s more expensive membership. Or maybe you already took that leap. Either way, here are three interesting facts to know about the Executive membership and how it works.

1. You’re guaranteed your upgrade fee even if you don’t make it back

The problem with upgrading to Costco’s Executive membership is that you risk not spending enough to recoup the extra $65 it costs. It takes $3,250 a year in Costco spending to earn $65, since the Executive membership gives you 2% back on purchases. So once you’ve spent even $1 more, you’re ahead financially.

But here’s a little-known secret about the Executive membership. If you don’t spend enough to earn $65 back during the year, Costco will allow you to downgrade your membership and refund you the difference. For example, if you spend $2,700 at Costco one year and only earn $54 back on your Executive membership, when you go to downgrade, Costco will refund you $11 so you get your $65 back either way.

Meanwhile, if you do end up spending more than $3,250, you may pocket quite a lot of cash for the year — especially if you combine the Executive membership benefit with a credit card offering great rewards. Click here for a list of the best credit cards for Costco shoppers.

2. It’s Costco’s most popular membership despite costing double

Since an Executive membership at Costco costs twice as much as a Gold Star membership, you might assume that most people aren’t willing to pony up the extra money. But actually, the Executive membership is Costco’s most popular. The company says 52 million members are of the Executive variety, representing a little more than half.

Now, you might assume that if you’re only an occasional Costco shopper, it doesn’t make sense to pay extra for the Executive membership. But you never know when a one-time purchase might put you over the $3,250 mark, making it so the Executive membership pays off. Because there’s no risk involved, it’s worth giving it a try even if you’re doubtful you’ll make your money back.

3. The maximum amount of cash back you can earn just increased

On Sept. 1, Costco raised the cost of an Executive membership from $120 to $130. At the same time, it increased the maximum amount of cash back you can earn per year from an Executive membership from $1,000 to $1,250.

That may seem like a positive change at first. But it’s also unlikely to affect you.

To earn $1,250 in cash back from an Executive membership, you have to spend $62,500 a year at Costco. That’s a lot of bulk groceries. For the average shopper, that change won’t have much of an impact. However, if you happen to have a lot of large purchases, it’s possible you could end up pocketing extra cash back.

For example, say you just bought a house and need to furnish every room. If you buy a living room set, several bedrooms sets, a kitchen table, chairs, accessories, patio furniture, and several TVs from Costco on top of your typical groceries and household supplies, then it’s conceivable that you could benefit from the new maximum reward.

But in general, your goal shouldn’t be to chase a higher Executive membership reward by making more purchases than you need to. Instead, shop like you normally do and see how much cash back you get at the end of the year — knowing that in a worst-case scenario, you’re going to break even on your $65 upgrade cost.

There’s a reason Costco’s Executive membership is so popular. Consider giving it a try and seeing how much you benefit from it.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and JPMorgan Chase. The Motley Fool has a disclosure policy.

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Are you afraid that using a rewards credit card will result in you going into debt? Here’s how to earn rewards the right way. [[{“value”:”

If you use credit cards often but have a credit card that doesn’t earn rewards, you’re missing out. You can earn points, miles, or cash back when you swipe your card.

But are you worried you may go into debt while trying to earn rewards?

I have good news — you can earn rewards without accumulating debt. You just need to take care when using your cards. I’ll share a few strategies to help you succeed.

Don’t spend more than you can afford

When you take extra care to manage your credit card spending, it’s easier to avoid debt. It’s best to treat your credit cards like a debit card. When swiping your debit card, money is taken directly from your checking account. That means you can only spend the money you have.

Treating your credit cards like this is a good strategy. Only spending what you can afford helps ensure you don’t rack up a high credit card balance.

If you struggle to manage your spending, budgeting can be helpful. You can use digital tools to set spending goals and monitor your progress. Click here to review the top budgeting apps that include useful money management tools.

Always pay your entire statement balance

In addition to spending what you can afford, you should prioritize paying your entire statement balance every month. Your credit card bill will list a minimum payment amount and the statement balance. You’ll be charged interest if you only pay the minimum amount due.

According to the Federal Reserve Bank of St. Louis, the average credit card interest rate was 21.76% in August 2024. That’s a high interest rate and a recipe for disaster once interest fees begin to hit your account. The more your balance climbs, the harder it is to get out of debt.

Getting into the habit of paying your statement balance in full is wise. This way, you never carry a balance on your card — allowing you to avoid debt.

If you’re spending within your means and want to simplify your life, consider enabling automatic payments. You can enable this through your online credit card account, and be sure to set it up so the entire statement balance is paid off.

Choose rewards cards that match your spending

Here’s one final tip: Choose credit cards that provide rewards that match your spending. You’ll earn rewards faster when you choose a card that aligns with your spending habits. Plus, it can reduce the temptation to spend beyond your means just to earn rewards.

If you typically make purchases in several top spending categories, choosing a card that offers bonus rewards in select spending categories may be the best strategy.

But make sure you choose a card with bonus rewards categories that align with your spending. If you mostly spend money on groceries and gas, getting a travel card with bonus rewards on travel purchases doesn’t make sense. Instead, look for a gas and grocery rewards card.

However, a flat-rate rewards card may be a better choice if you have scattered spending across purchase categories. These cards earn at a set rate, such as 2% cash back on all purchases. This provides a simple way of earning rewards without having to track bonus categories.

Don’t be afraid of credit cards

Credit cards can offer many benefits. You can use them to improve your money management skills, build credit, and earn rewards. Don’t assume that using a rewards card will result in you ending up in debt. If you make responsible decisions when using, paying, and managing your credit cards, you can earn rewards while saving money on expensive interest costs.

Don’t have a rewards credit card? Now is an excellent time to start earning rewards. Explore our list of the best cash back credit cards with big rewards.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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