3 Signs It's Time to Downgrade Your Costco Executive Membership

Why pay up when there's a less expensive alternative?

When I first started shopping at Costco many years ago, I stuck to a basic membership for quite some time. Back then, it was just me and my husband, and we only needed so much food and so many household supplies from Costco.

But these days, we have ourselves and three kids to feed. And so between needing extra produce, milk, snacks, toilet paper, cleaning supplies, and just about everything, we maintain a Costco executive membership rather than a basic one.

The cost of an executive membership at Costco is $120 a year as of this writing. There's a good chance prices will go up fairly soon, since Costco hasn't had a price increase in quite some time. Meanwhile, a basic Costco membership costs just $60, so there's quite a bit of a difference between the two.

I can say with certainty that my Costco executive membership is worth paying for. That extra $60 a year earns us 2% back on all Costco purchases, the same way you might get 2% cash back from a credit card. But if the following signs apply to you, then it may be time to downgrade your Costco executive membership to a basic one.

1. You don't shop at Costco as frequently

Maybe you've moved and don't have such easy access to a Costco store these days. Or maybe you've started shopping more at a specialty grocery store due to having certain dietary needs. Either way, if you find that you're not going to Costco as often as you used to, it may be time to downgrade to a basic membership.

2. Your household has shrunk in size

Perhaps your kids live at college for most of the year and you don't have as many mouths to feed. Or maybe you went from being married to getting divorced, and so your household size has been cut in half. In either scenario, it may not pay to maintain an executive membership if you don't expect to be buying as many groceries and supplies as you once did.

3. You're not spending enough to make the upgraded membership worth it

There's an easy math formula you can use to determine if a Costco executive membership makes sense for you. You'll break even on the cost of an executive membership versus a basic one if you snag $60 cash back per year. And to do that, you'll need to spend $3,000. So if you don't expect to spend over $3,000 at Costco in a year, downgrade. And if you're not sure, look at your credit card statements from the past 12 months and see what your total Costco tab comes to. If it's under $3,000, you basically have your answer.

A Costco executive membership can definitely be worth paying for when you have a larger household, you shop there frequently, and the cash back you get more than makes up for the additional $60 fee. But if not, then you may be throwing your money away by keeping your executive membership.