If you’re wondering if an executive membership at Costco is worth plopping down an extra $55 a year, we have the answer: Maybe. It all boils down to how much you spend.

The $110.00 annual membership fee is exactly twice that of the standard $55 membership fee. For that fee, executive members get a 2% annual cash back reward on purchases, access to discounted rates on home, auto, life, dental, medical and vision insurance; pre-arranged automobile pricing through the Costco Auto Program; discounted business services like payroll, bookkeeping and payment processing; and even discounted identity theft protection.

Perhaps the greatest benefit of the membership is the 2% annual cash back reward on most Costco purchases (terms and conditions apply, but most in-store purchases besides tobacco, and alcohol in some states, are included).

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Based on the cash-back reward alone, to make the membership fee worth it you’d need to spend $2,750 a year to get back your extra $55 membership fee. That breaks down to just under $230 a month, which, if you do any grocery and home-needs shopping at all, you realize is pretty easily achieved (the average American spends $151 on just food every week).

Here’s how the annual reward works: The 2% cash reward certificate (up to $750) is mailed with your annual membership renewal notice, two months prior to your annual renewal date. (You’d have to spend $37,500 to reach the $750 cash-back reward limit.)

The other executive membership benefits offer savings opportunities as well. For example, the Costco website estimates that executive members using their mortgage services could save an average of $4,277 over the typical life of the loan. (Purchase and refinancing services are provided and operated by First Choice Loan Services, Inc.)

So, if you’re going to spend $2,750 or more each year and possibly even take advantage of the other benefits offered, you should consider the executive membership.

How to Double Dip the Rewards

Where you can really see some savings is if you combine the executive membership with Citi’s new Costco credit card. Citi’s new Costco credit card allows eligible cardholders to earn 4% cash back on eligible gas purchases (on up to $7,000 of gas purchases per year, then 1% back); 3% back at restaurants and on eligible travel purchases; 2% back on Costco and Costco.com purchases and 1% back everywhere.

The card is taking the place of the American Express’s TrueEarnings Card from Costco, and improves upon that version’s reward structure, which offered 3% cash back on gas (up to $4,000), 2% back at restaurants and eligible travel and 1% back everywhere else. (Full Disclosure: Citibank and American Express advertise on Credit.com, but that results in no preferential editorial treatment.)

Of course, if you don’t pay down your credit card accounts each month, the interest can wipe out any potential savings you may accrue through cash-back rewards. If you currently have debt, you can see just how much your debt is draining your savings potential using this nifty lifetime cost of debt calculator. If getting debt-free isn’t possible (after all, some debt can be used for investments like real estate), improving your credit score can also help you sock more money away in your savings since a better credit score can get you better interest rates on mortgages, car loans and more. You can check your credit scores for free on Credit.com to see where you stand and make a better-credit action plan.

At publishing time, Citibank and American Express cards are offered through Credit.com product pages, and Credit.com is compensated if our users apply and ultimately sign up for the cards. However, this relationship does not result in any preferential editorial treatment.

Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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