3 Signs You're Throwing Money Away on a Costco Membership

Shopping at Costco is a great way to save money on everything from groceries to household supplies to apparel. You can even save on things like furniture, appliances, and travel bookings.

These days, a basic Costco membership costs $60 a year, while an executive membership that gives you cash back on your purchases costs $120. And these are reasonable fees to pay in the sense that they can more than make up for themselves under the right circumstances. But if the following signs apply to you, it may be that you're throwing your hard-earned money away on a Costco membership.

1. You hardly ever visit the store

It may be that your closest Costco warehouse club store takes 30 minutes to get to. Or it may be that you have a very busy schedule with little time for in-person shopping. Either way, if you hardly ever manage to make it over to Costco, and you don't tend to shop at Costco online, then it may not be worth it to pay for a membership.

Let's say each visit to the store saves you $10 on groceries, but you only manage to set foot in Costco once every three months. That means you're paying $60 to save yourself $40.

2. You mostly shop at Costco online

Here's a little secret about Costco -- you don't need to be a member to shop at Costco online. Now there are exceptions, because some online items are designated as member-only items. But most of Costco's online inventory is available to the masses -- membership or not. So if you only shop at Costco online, you may want to consider forgoing your membership.

Now that said, Costco does impose a 5% surcharge on online purchases made by non-members. But even so, you might come out ahead financially by paying those extra fees and saving on the cost of a membership.

Let's say you place a $100 online order at Costco nine times a year. That $900 in total, and 5% of $900 is $45. That's less than the cost of a basic membership.

3. You're paying for an executive membership you're not getting value from

For an executive membership at Costco to be worth the money, you need to spend more than $3,000 a year. The reason? It costs an extra $60 to upgrade to an executive membership, and you get 2% back on Costco purchases in exchange. Since 2% of $3,000 is $60, you'll want to spend at least a touch more than that to justify the extra $60 outlay. But if you only spend, say, $2,000 a year at Costco, then you're wasting money on an executive membership, since you're only getting $40 back.

The good news is that Costco will allow you to downgrade from an executive membership to a basic one at any time. Simply go to customer service and they'll switch your membership without a hassle.

For many people, getting a Costco membership is an easy call. But if these signs apply to you, it may be time to rethink yours.