What the 2024 Executive Member changes mean for your membership
Costco's Executive membership tier changed its reward structure and benefit terms in 2024, shifting how members earn cash back and what services they can access. The most visible change: the 2% cash back reward on most purchases now has an annual cap of $1,000 (meaning you stop earning cash back once you've received $1,000 that year). The membership fee also increased. These changes affect how much value you get from the card depending on your annual spending, and whether the Executive tier still makes financial sense for your household.
If you're already an Executive member, Costco sent notices about the changes before they took effect. If you're considering upgrading from Gold Star (standard) membership, you need to know the new math before you commit to the higher fee.
Key Takeaways
- The 2% cash back reward now caps at $1,000 per year, meaning members who spend more than $50,000 annually stop earning rewards on additional purchases.
- Executive membership fees increased, so the break-even point (the spending level where the rewards cover the fee) is now higher than it was before.
- The 5% cash back on gas and Costco.com purchases, and the warehouse discounts on services like tire rotations, remain unchanged.
- Members who spend less than $3,000 per year may find Gold Star membership more cost-effective after the fee increase.
How the $1,000 annual cash back cap works
Under the new structure, you earn 2% cash back on most Costco purchases, but once your cash back rewards reach $1,000 in a calendar year, you stop earning additional rewards on further purchases. This means you'd need to spend $50,000 in a year to hit that cap (since 2% of $50,000 is $1,000).
For most households, this cap doesn't matter—the average Costco shopper spends far less than $50,000 annually. But for large families, small businesses, or members who use Costco for both groceries and supplies, the cap can reduce the value of the membership. If you typically spend $60,000 per year, you now earn rewards on only the first $50,000 of that spending, losing out on $200 in cash back.
The 5% cash back on gas purchases and Costco.com orders is separate and does not count toward the $1,000 cap, so those rewards continue to accumulate independently.
Executive membership fee increase and the new break-even point
Costco raised the Executive membership fee as part of these changes. The exact amount depends on when you renew, but the fee is now higher than the previous tier. To determine whether Executive membership still makes sense for you, calculate your break-even point: the annual spending level where your 2% cash back rewards equal the membership fee.
If the Executive fee is $130 per year (this varies by region and renewal date), your break-even point is roughly $6,500 in annual spending. Spend less than that, and Gold Star membership costs you less overall. Spend more, and the Executive rewards start to pay for themselves. With the new cap, members who spend between $6,500 and $50,000 per year still benefit from Executive membership, but the value proposition is tighter than it was before.
Costco typically announces fee changes in September, and they take effect on your next renewal date. If you renewed recently, you may not see the new fee until next year.
Which benefits stayed the same and which changed
The 5% cash back on gas (at Costco pumps) and Costco.com purchases remains in place and is not affected by the $1,000 cap. Warehouse services like tire rotations, optical exams, and pharmacy discounts are unchanged. The Costco Concierge service (travel booking, insurance referrals) and roadside information are still included.
What did change: the household card benefit. Previously, Executive members could add a household card holder who received the same rewards rate. Now, only the primary member earns the 2% cash back; household card holders earn 1% on warehouse purchases. This means if you were splitting purchases between two cards to maximize rewards, you're now earning less on the secondary card's purchases.
Travel and insurance discounts through Costco Travel and the Costco Insurance Agency remain available to Executive members at the same level as before.
When to downgrade to Gold Star membership
If your annual warehouse spending (not including gas or online) is below $3,000, downgrading to Gold Star membership will save you money. The difference between the two membership fees is now larger, so the spending threshold where Executive makes sense has moved higher.
To downgrade, contact Costco member services at the warehouse or call 1-800-955-2292. You can request a refund of the difference if you're within 45 days of your renewal date. Some members choose to downgrade temporarily if they know they'll spend less that year, then upgrade again when their spending picks up.
Keep in mind that if you have a Costco credit card (the Costco Anywhere Visa), the card itself still earns rewards independent of your membership tier. Downgrading your membership doesn't affect the card's rewards rate.
How the household card change affects family spending
If you have a household card holder, the change from 2% to 1% cash back on their warehouse purchases reduces the total rewards your household earns. For a household that splits $20,000 in annual warehouse spending evenly between two cards, the change means losing $100 per year in cash back (the difference between 2% and 1% on $10,000).
Some households respond by consolidating purchases onto the primary member's card, which requires coordination but preserves the 2% rate. Others find that the household card is still worth keeping for convenience, even at the lower rate. The math depends on how much the secondary cardholder typically spends.
If you're considering adding a household member, factor in the 1% rate when deciding whether it's worth the cost. Costco charges a fee to add a household card, so weigh that against the rewards you'll actually earn.
Comparing Executive membership to other warehouse options
Sam's Club and BJ's Wholesale offer competing membership tiers with different reward structures. Sam's Club's top tier (Plus membership) offers 2% cash back with no stated cap, though the membership fee is comparable to Costco's. BJ's offers a tiered rewards program that works differently. If you're a member of multiple warehouses, the Costco changes might prompt you to reconsider where you do most of your shopping.
The decision isn't just about cash back percentage—it's about which warehouse has better prices on the items you actually buy, how convenient the locations are, and whether you use the other benefits (pharmacy, optical, gas). Some households find they save more by shopping at a warehouse with lower base prices, even if the rewards rate is lower.
Frequently Asked Questions
Do I lose my cash back if I don't spend $50,000 in a year?
No. You earn 2% cash back on every purchase until you reach $1,000 in total rewards for the year. Once you hit that cap, you stop earning rewards on additional warehouse purchases for the rest of that calendar year. The cash back you've earned is yours to keep.
Does the $1,000 cap include gas and Costco.com purchases?
No. The 5% cash back on gas and Costco.com is tracked separately and does not count toward the $1,000 cap. You can earn unlimited 5% rewards on those categories.
If I downgrade to Gold Star, can I upgrade back to Executive later?
Yes. You can upgrade or downgrade your membership at any time. If you upgrade mid-year, you'll pay a prorated fee for the remainder of your membership term. Contact member services to make the change.
Does my Costco credit card still work if I downgrade my membership?
Yes. The Costco Anywhere Visa card continues to earn rewards based on the card's terms, regardless of your membership tier. However, you need an active Costco membership (any tier) to use the card at the warehouse.
How do I know if I hit the $1,000 cash back cap?
Your Costco account online and the Costco app show your year-to-date cash back rewards. You can check anytime to see how close you are to the $1,000 cap. Once you reach it, the app will indicate that you've hit the annual limit.