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In case you haven’t heard the news, for the first time in seven years, the cost of a Costco membership is rising. Starting Sept. 1, you’ll pay $65 for a Gold Star membership to Costco instead of $60. And an Executive membership will cost you $130 instead of $120, which means you’ll have to earn a bit more cash back to recoup your upgrade charge.
Membership fee hikes alone shouldn’t drive you to give up your Costco access. These increases are relatively small in the grand scheme of things. And with careful planning, you can probably incorporate them pretty easily into your budget.
But if the following situations apply to you, then it pays to consider cutting ties with Costco before the cost of a membership goes up.
1. You’ve stopped shopping there
Maybe your cooking habits have changed and buying groceries in bulk is no longer as convenient for you. Or maybe a discount grocer recently opened in your neighborhood and the prices there are easier on your credit cards than Costco’s.
No matter the reason, if you’ve been shopping at Costco a lot less often, to the point where you can’t remember the last time you set foot in the store, then it’s probably best to cancel your membership. You don’t need to donate $65 or $130 to Costco when you’re not getting value out of the fee you’re paying.
Remember, too, that if you only need to go to Costco a couple of times a year, you may have a friend or family member you can tag along with. Costco has made a number of moves this year to crack down on non-members, such as limiting food court access to members only and installing membership card scanners at the front of the store. But Costco’s policy is still to allow members to bring a guest along with them.
2. You’ve moved far away
It’s not unreasonable to drive 15 or 20 minutes each way to visit your local Costco. But if you’ve moved and are now looking at a 45- or 60-minute drive to get to Costco, that may not be a distance you can work into your schedule. In that case, it could pay to see if there’s another warehouse club store that’s closer to where you live and cancel your Costco membership.
Remember, too, that the longer it takes to get to Costco, the more you’re likely to spend on gas. It’s not worth saving $10 a week at Costco if it also costs you $10 extra to get there compared to a closer store in your area.
3. You can’t stop overspending
When you buy groceries and cleaning products at a regular supermarket, you do risk making impulse purchases, like the cupcakes your child begs for or the candy bar in the checkout lane. But at Costco, the potential for impulse spending is much greater because Costco’s inventory is much more extensive.
At Costco, you might walk in for milk and fruit and leave with a shopping cart full of apparel. Or you might buy a new electronic device on a whim because you see it on sale.
If impulse purchases have been a problem for you at Costco, to the point where they’re messing with your budget or causing you to rack up debt, then you’re better off not giving yourself access to the store. It’s not worth it to save $40 a month on groceries at Costco if you end up making over $100 worth of impulse purchases.
If you’re getting good value out of your Costco membership now, then chances are, you’ll continue to get good value even once it costs $5 or $10 more per year. But if these situations apply to you, then it could pay to cancel your membership in August.
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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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and JPMorgan Chase. The Motley Fool has a disclosure policy.
