How does a Costco membership work?

Costco memberships, regardless of your country of origin, may be used at any Costco location around the world. To be eligible for a membership, you must meet the following criteria:

  • 18+ years old
  • Live in a household where no one else currently has a Costco membership
  • Have a legal/valid Canadian ID or document proving your identity.

Comparing Costco membership tiers

If you are eligible for membership, there are three tiers you may choose from, each of which comes with specific perks and unique pricing. Here's a quick breadown of each Costco membership tier:

Gold Star

The Gold Star Costco Membership includes up to two household cards (one member, plus one additional household member 18 years of age or older) for $60 CAD, renewable annually. This membership is the most basic of the three and allows you to purchase products at any Costco location. Upon sign-up, you’ll also receive a $10 Costco Shop Card as a reward, which acts as a gift card.

If you prefer to shop in bulk, or prefer to make one stop rather than several for the household items you need (ranging from groceries to electronics), a Gold Star Costco membership is a good option for you, and is likely worth the annual investment.


A Costco Business membership allows you to make personal, resale, or business-related purchases at any Costco location. Like the Gold Star membership, the annual fee is $60 CAD but includes more perks, such as:

  • A free household card
  • Ability to add affiliate cardholders for $60/EA
  • Purchase for resale

With this plan, members must provide Costco with appropriate resale information to take advantage of the purchase-for-resale perk.

Whether you run your own business or are a buyer for a larger company, a Costco Business membership could be a good option if you frequently purchase a variety of items for business in bulk, or if you regularly buy items for resale purposes.


Finally, the Executive Membership is the highest tier of the Costco memberships and costs $120 CAD annually. This includes the standard $60 membership fee plus a $60 upgrade fee, and will provide:

  • A free household card
  • Annual 2% reward on qualified Costco purchases (terms and conditions apply)
  • Additional benefits and greater savings on Costco services (i.e. dental plans, identity protection, business health insurance, and more)
  • Extra benefits on Costco Travel products

Of the three Costco membership tiers, the Executive level clearly provides the most benefits but it’s important to determine whether the $120 annual membership fee is worth the investment for your personal needs or business before subscribing.

Other Costco membership perks

Did you know that you can use Costco for more than just buying in bulk?

Costco offers a range of special discounts and services to its members, ranging from car insurancehome insurance, identity protection, home loans, personal checks, self-storage, business and personal health insurance, and travel services. They also offer payroll and payment processing services for businesses. Other Costco services to check out include:

  • Costco online shopping: Costco delivers an online shopping experience that’s similar to what many online retailers offer. You must register for an account to access and place orders for the vast collection of products and services available. Upon registration, your Costco membership is linked to your online account.
  • Costco Travel: Costco’s collection of travel booking services may be your go-to option if you’re looking to book your next cruise, vacation, or car rental. While Costco has a solid reputation, it’s still always a good idea to do some comparison shopping to help you find other competitive rates.
  • Costco Gasoline: Most Costco locations provide gasoline that’s often priced 6 or 7 cents per litre below most of the leading gasoline retailers. If you refuel frequently, this gasoline discount may be worth the cost of your Costco membership.
  • Costco Pharmacy: Most Costco locations include a full-service pharmacy offering a wide collection of health-related products and services. Costco members in all provinces but Prince Edward Island and Quebec can order prescriptions online and have them delivered to their home address.
  • Costco Optical: Most Costco locations also avail an optical department. You don’t need to complete an eye examination from a Costco location to buy eyewear products.
  • Costco credit card: Costco warehouse locations only accept Mastercard branded credit cards. Members can enjoy the no-annual fee Costco Mastercard from Capital One. The card offers 2% cash back on gasoline purchases, 3% at restaurants, and 1% on other purchases.

While Costco’s extensive list of services is impressive, membership will only make sense for you if you have the means to shop and buy in bulk. Let’s take a closer look at whether a Costco membership ultimately provides a satisfactory return on spending for the average customer.

Is getting a membership to Costco worth it?

A Costco Gold Star or Business membership automatically makes sense if Costco tends to be your one-stop shop for your grocery, home, tech, and business needs. Basically, if you prefer buying in bulk but aren’t completely sure whether you’ll spend enough to benefit from an Executive membership, a Gold Star or Business membership is highly recommended.

Obviously, the biggest advantage of a Costco Executive membership is the 2% cash back savings; however, this 2% cash back only makes sense if you naturally spend enough to reap a good return. You shouldn’t be struggling to spend more when you shop just to make an Executive membership worth it.

Items that can pay off your Costco membership

If you’re still weighing whether a Costco membership is worth it, you probably need to take advantage of the items that can help pay off your membership. These may include:

  • Tires: You might be paying too much buying your tires outside the Costco warehouse club. Tire purchase prices at Costco are a huge bargain. Get up to $80 off certain tire brands, which can help conveniently pay off your Costco membership.
  • Guarantees: The Costco guarantee system gives more reason to shop at the warehouse club, and can single-handedly pay off your membership. If you’re dissatisfied with your Costco membership, you’ll get a refund for its full cost.
  • Gas: Filling up at Costco stations will help you save money on gas. Filling up at a Costco gas station a few times a month can earn you enough savings to pay for your Costco membership.
  • Wine: Your average savings at Costco wine will be about $5 per bottle. A dozen bottles per month with single-handedly pay off your Costco membership.
  • Movie tickets: Costco may sell you two movie tickets for nearly half the cost of two regular movie tickets. If you’re part of the movie premiere gang, the few dollars off your movie ticket will rack up to an amount worth the cost of your membership.

Get more benefits with the Costco Capital One Cash Back Card

Interested in more member benefits? The Costco Capital One card, exclusively for Costco members, provides additional rewards. Whether you’re a Gold Star, Business, or Executive member, you can use your Capital One card on Costco purchases and everything else to receive 3% cash back on restaurants and dining, 2% on gas purchases, and 1% on all other purchases (though your first $3,000 on other purchases will only amount to .5% cash back, meaning there’s technically a hidden $15 annual fee that offsets your rewards). However, if you don’t want the Capital One credit card, there are some other great credit cards that are ideal to use at Costco.

Possible return on spending

To determine whether a Costco membership is worth the annual investment, we’ll need to calculate your potential return on spending. To give you a better idea of your possible savings, here’s a projected rate of return for one year as an Executive member using the Costco Capital One card:

  • $4,200 CAD = Costco visits ($84 annual cash back)
  • $3,500 CAD = restaurants/dining ($105 annual cash back)
  • $2,100 CAD = gas ($42 annual cash back)
  • $8,800 CAD = misc. ($58 annual cash back after $3,000 spend)

These annual projections reflect the average Canadian’s spending habits in each category. In simplified terms, an Executive level membership is worth it if you’re spending at least $3,000 per year on Costco visits.

PC Optimum vs Costco?

PC Optimum is another popular program for earning points and saving on your purchases. One of the biggest advantages of this option is that there’s no annual fee, unlike a Costco membership. Basically, with a PC® credit card, you can enjoy savings without having to spend anything extra, though you may only be eligible for certain cards based on your total household income.

With the three PC Optimum credit cards, your return rates for the same annual expenses will look like this (note that the following point rates only apply to shopping at Loblaws Companies Limited grocery locations and other stores may have different point systems):

  • PC® Mastercard®: 10 points per $1
  • PC® World Mastercard®: 20 points per $1
  • PC® World Elite Mastercard®: 30 points per $1.

With the previously-tallied $18,600 CAD in expenses each year, including Costco visits, using a PC® World Mastercard® (for those with a minimum household income of $60,000 per year), you can expect to rack up 372,000 points. These points are redeemable for qualifying purchases but do not convert to direct cash back. Note that you can only redeem points for purchases made from retailers that participate in the PC Optimum program and that you can’t redeem any points until you’ve collected at least 10,000. Once you’ve hit this number, you can redeem up to 500,000 points (or $500) at a time.

Comparing your possible savings as a Costco member vs. a PC Optimum cardholder, you’ll have more spending flexibility as a Costco member but can potentially save more money as a PC Optimum cardholder ($169 vs. $372).

Final word

Ultimately, it’s important to sit down and figure out your annual spending before investing in a Costco membership, especially on an upper-level tier like the Executive membership. If your calculations show that you’ll likely spend enough to cover the annual fees and you frequently buy in bulk, a Costco membership could be a great financial option for you.

Sponsored advertising. President’s Choice Financial® Mastercard® is provided by President’s Choice Bank. The PC Optimum™ program is provided by President's Choice Services Inc. President’s Choice Bank is not responsible for the contents of this site, including any editorials or reviews that may appear on this site. For complete information regarding the PC® Mastercard®, PC® World Mastercard®, or PC® World Elite Mastercard®, please click on the “Apply Now” or other applicable button.

Caitlin is a skilled freelance writer with an extensive background in finance writing for a number of finance blogs such as Her works can also been seen in American Profile, DeSoto Magazine, MotorHome Magazine, German-Life, and many others.

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