Costco Increased Membership Fees Sept. 1. Here's Why It’s Still Worth It
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With nearly 128 million cardholders worldwide, Costco is unquestionably a retail giant. What sets Costco apart from most competitors is that customers must pay for a membership before purchasing a box of cereal, a baby stroller, or a new television.Since 2017, membership prices have ranged from $60 to $120 per year, but on Sept. 1, the warehouse mammoth increased its membership fees, capturing the attention of anyone watching their household budget. Here's why it's still worth the price of admission.The membership fee increaseThe last time Costco's annual membership fees increased was in 2017. At the time, its Gold Star membership hit $60, and customers could purchase an Executive membership for $120. While much has been made of Costco hiking prices, Gold Star members will now pay $65 instead of $60, and Executive members will fork over $130 rather than $120.Here's how that shakes out over a one-year membership once you break the annual fee down into 52 weeks:While Gold Star members were paying a little under $1.16 per week for their membership, they'll now pay $1.25 weekly. That's a weekly increase of $0.09.Executive members previously paid $2.31 per week. Their new weekly cost is $2.50, an increase of $0.19.While every cent counts when you're trying to save money, it's doubtful that such a small increase will negatively impact your household budget.Costco prices remain competitiveIt was easy to become numb to the rapid inflation that began during the pandemic. While no one enjoyed it, tales of manufacturing shortages and supply chain issues helped explain why prices were spiking. As we approach five years since COVID-19 was first announced, prices have remained high.The good news is that the Federal Reserve has managed to get the rate of inflation under 3%, and some grocery prices have begun a slow crawl downward. Still, they remain far too high for the average family.And this is where spending an extra $0.09 or $0.19 per week on a Costco membership makes sense. It's estimated that the average Gold Star member could save over $1,000 per year if they purchased their staples from Costco rather than a local grocery store.It's tough to complain about a small membership price hike when such savings are possible.Continue to pick up your Costco favoritesAsk any Costco member about the products they routinely pick up at Costco, and they'll likely tell you about several. Dropping a Costco membership over a $5 or $10 price increase means losing access to those favorites.While you may be able to purchase the same products elsewhere, you could end up paying more for them. And even if you find an item for the same price or (gasp) less, you'll miss out on picking up the bulk items you trust to save you money.Whether you love shopping at Costco or would rather have a root canal than face the congested parking lot and crowded aisles, there's no denying that strategic buyers manage to save money. That reason alone is enough to justify paying a bit more for membership.Top credit card to use at Costco (and everywhere else!)
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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.Dana George has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
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