Here’s How Much Costco Executive Members Would Have to Spend to Max Out Their Cash Back Rewards

Earning 2% cash back on the majority of your purchases is one of the best benefits of a Costco Executive membership. Many households will quickly earn enough rewards to cover the Executive membership fee and more. If you combine those rewards with a Costco credit card, you’ll really be cooking with gas.

There’s a limit to how many Executive rewards you can rack up — Costco caps the total at $1,250 a year. But don’t worry. Even if you have a big family and shop at Costco every week, you’d likely struggle to hit that bonus cap. It translates to a total of $62,500 a year in spending — about $5,210 a month.

Below, we’ll talk about how you might reach that cap — as well as the best ways to maximize your Costco membership.

How Costco’s Executive rewards work

You earn Executive rewards every time you shop at Costco. Most spending qualifies, whether it’s in-store, on the Costco website, or through Costco Travel. There are some exceptions, such as gas, cigarettes, gift cards, and alcohol in some states. To check your rewards balance, log on to the Costco website and go to the account details page.

Costco pays out rewards in the form of an annual gift certificate. Executive members will get their certificate about two months before their membership is due to renew. You can put your rewards certificate toward the majority of Costco spending, though you can’t use it at gas stations or the food court.

Reaching Costco’s Executive membership cap

Whenever you sign up for services that charge an annual fee, think about what value you’ll get. For example, work out how much you need to spend to earn enough rewards to cover the fee. If there’s a cap on the cash back, it’s also good to know whether you’re likely to reach it.

In terms of covering the fee, a lot of households would easily get there with their grocery spending. Costco’s Executive membership costs $130 a year, while its basic Gold Star membership costs $65. So if you earned 2% rewards on around $270 of monthly spending, you’d cover the extra $65 you pay for the Executive membership. (A monthly spend of just over $540 would cover the whole membership.)

Maxing out your membership rewards is another story. It certainly isn’t impossible to do — in fact, some Costco redditors say they’ve bought a second annual membership after they’ve maxed out the rewards on their first one. Even so, the majority of households are unlikely to come close.

The average American spends around $830 a month on groceries, per The Motley Fool Ascent’s research. Let’s assume someone buys all their groceries at Costco, along with some personal care products, clothes, and miscellaneous items. That might take them close to spending $1,000 a month at the warehouse giant.

To spend over $5,000 a month in Costco, you might need to book some holidays, buy a lot of gold bars, bring in a few friends to shop with you, and eat nothing but Kirkland products. In short, very few Costco shoppers need to worry about outspending their Executive rewards.

How to get the most out of your Costco membership

Getting value from your membership means spending wisely, which isn’t the same as simply spending more. Those wide aisles are a treasure trove of exciting products and offers, making it easy to spend more than you intended. Stick to your list and keep track of costs.

1. Combine your Executive membership with a cash back credit card

There are some excellent rewards or cash back credit cards that work well with Costco shopping. Combining your 2% Executive member bonus with a credit card that pays 1% or 2% on grocery shopping is a powerful combo. Just be sure to pay down your balance in full every month so interest charges don’t eat into your earnings.

2. Use all your Costco membership perks

That Costco membership fee gives you more than just low-cost groceries. Check out the Costco Travel portal for deals on vacations and car rentals when you’re booking your next trip. Costco’s optical and pharmacy services can also be excellent value. And that’s before we touch on insurance and auto deals. Don’t assume Costco will always have the best deal, but don’t forget about those extra services, either.

Be alert for offers on the products you buy regularly. The more you shop at Costco, the more you’ll develop a nose for which items are often discounted. Use Costco’s coupon booklet, website, or the app to find the latest deals.

Bottom line

If you spend a lot of money at Costco, it’s worth being aware of the Executive membership reward cap. But if you’re spending that kind of money, it’s more important to maximize your rewards. Combine your executive rewards with credit card bonuses and cash back apps to get more back from every dollar you spend.