Since mid-2017, Costco members have been paying $60 a year for a basic membership and $120 a year for an Executive membership. And for a while, it seemed like those prices might stick around forever.
But earlier in July, Costco announced that effective Sept. 1, its membership fees will be rising. The cost of a basic membership will increase to $65 per year, while the Executive membership will increase to $130 per year.
At first, the idea of paying more money for Costco access might annoy you. And that makes sense.
These days, it seems like every business is raising costs. You’re probably paying more for a takeout meal from your local diner now than you were a year or so ago. And chances are, your cable/streaming bill’s gone up, and so has your rent.
Having Costco pile on may not be ideal, to say the least. But actually, there are a couple of reasons why Costco’s upcoming fee hike shouldn’t bother you too much.
1. It’s a pretty small increase from Costco
At a time when you’re trying to save money and avoid adding to your bills, any price increase from Costco may be unwanted. But when you think about what those fee hikes amount to on a monthly basis, they’re negligible.
If you have a basic membership, you’re looking at spending $0.42 more per month. For an Executive membership, your cost is rising by $0.83 per month.
Here’s another way to look at it. If you have a basic membership, your higher fee will be the equivalent of one rotisserie chicken per year — two if you have an Executive membership. All told, it’s just not a huge jump, and Costco was deliberate about that.
2. Your higher fee might result in added savings and benefits
Membership fees are a huge source of revenue for Costco. Since Costco makes so much money from them, it’s able to use that revenue to offset the cost of stocking its shelves. The result? A wide range of inventory at affordable prices.
To put it another way, you might spend $5 or $10 more on a Costco membership starting Sept. 1, but you might save $20, $30, $50, or $100 more when shopping at Costco throughout the year.
Plus, we don’t know what plans Costco has once those membership fee increases take effect. Maybe Costco will introduce new services, like expanded catering options. Maybe it will increase its line of affordable clothing so you can save more on apparel. Or maybe it’ll expand its auto services so you can not only buy tires at Costco, but perhaps one day get your car‘s oil changed for less.
To be clear, these are just examples — not things Costco has promised. The point, however, is that Costco gains a lot by increasing its membership fees, and it’s likely to pass a lot of that benefit on to members.
Nobody wants to spend more money than they have to these days. It’s understandable that a Costco fee hike isn’t exactly welcome news. But remember, fitting your new fee into your budget shouldn’t be all that difficult given how small the increase is. And what you spend on a membership fee, you might easily make back in the form of savings during the year.
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