Why You Should Never Pay Full Price for Your First Year at Costco

A Costco membership costs $60 per year, or $120 to earn 2% back on an Executive membership. But paying the full $60 for your first year at Costco is a rookie move -- one you can never undo. In fact, if you time it right, you can pay half your annual dues for a Gold Star membership. Here's how. 

Get your first membership when Costco is running a promotion  

More often than not, Costco runs promotions for new members. Often, these promotions will give you a Costco Shop Card -- basically a gift card you can use at Costco -- when you purchase your first annual membership and enroll in auto-renewal. 

For instance, for the month of September, Costco will give you a $30 Costco Shop Card when you purchase a Gold Star ($60) with promo code CJPROMO. As long as you enroll in auto-renewal of your membership, you'll get $30 to spend at Costco, which is almost like getting 50% off your first year. 

The promo also works toward an Executive membership, which costs $120 per year. With the promotion applied, you'll get the same $30 Shop Card, bringing the effective cost of your membership to $90. 

Can returning Costco members get a promotion? 

The promotion defines a new member as someone who hasn't had a Costco membership in the last 18 months. So if a year and half or longer has passed since your membership expired, you could qualify for the promotion. 

Will you get more value from the Gold Star or the Executive membership? 

The current promotion will give you a $30 Shop Card whether you choose the Gold Star ($60) or Executive membership ($120). But the membership that provides the best value for your personal finances will depend on how much you expect to spend at Costco. 

The Executive membership costs more but pays you 2% in cash back on Costco purchases made in-store and online (up to $1,000 in rewards per 12-month period). In terms of earnings, you would need to spend at least $3,000 to earn $60 in rewards, which is the difference between the two memberships. To earn the full value of your first year for an Executive membership ($90, after factoring in the $30 Shop Card), you would need to spend at least $4,500. 

That's not a lot of money, especially if you shop at Costco frequently. A $4,500 annual budget breaks down to $375 monthly. Most families can spend that biweekly, especially if they have kids.

How to get your Costco promotion

To ensure that you're getting a Costco promotion, here's what you need to do: 

• Sign up at Costco.com. 
• Use promo code CJPROMO at checkout. You should immediately see a $0.01 deduction on your membership dues. This lets you know the promo has been applied. 
• Pay with a Visa credit card (Costco only accepts Visa cards).
• Enroll in auto-renewal. Note: If you do not enroll in auto-renewal, you will not get your Shop Card. 
• Enter the correct address and you'll receive your Shop Card within 4 to 6 weeks. 

This is fairly easy criteria to satisfy and will give you some cash to spend at Costco. And don't worry -- if you can't commit to a Costco membership in September, there's a good chance Costco will run a similar promotion in October. Check online before you purchase your first membership and see if an active promo code will help you save money.