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If you’re a fan of Costco, you know the big box giant sells everything — from furniture to groceries. While it may seem like a wise bet to spend all of your time here and reap the savings, knowing whether or not Costco is good for your wallet may require some detailed calculations. Specifically, whether the membership fee of $55 ($110 for an executive membership) is worth it for the reduced prices. The answer depends on your financial situation.
It seems you can sometimes make money at Costco by purchasing gift cards that are worth more than what you pay. For example, one Costco promotion sold $300 American Airlines gift cards for $269.99. If you don’t actually use those cards, you may be out cash for no reason even if technically you saved money. On the other hand, you can always sell gift cards online through trading sites like Cardpool.
At Costco, it’s easy to spot the deeply discounted items. They are priced ending in .97 (as opposed to .99). If you use these products, you’re likely getting a good deal, because the selling cost is less than what Costco was originally asking for.
With an executive membership, you pay an additional $55 per year. However, you also get 2 percent back on your purchases. That means spending $2,750 annually at Costco to recoup the fee. However, busy families who go grocery shopping and buy all their household goods at Costco may easily rack up that bill in any 12-month period.
One of Costco’s main benefits is the ease of finding everything you need all in one place. For many families, this means less time doing errands or stocking up on commonly used goods. Fewer drives to the store means less gas. For this reason, you may consider it a cost reduction to do all your shopping at Costco.
The main drawback of spending a lot of time at Costco is the temptation of impulse buys. While you may save money on paper, you’re actually losing money if you are charging up your credit card for something you would not have otherwise bought. Like any shopping experience, it’s smart to simply remain conscientious and mindful of where your money is going. Learn how to make the most of your warehouse club membership before you lose cash to impulse buys.