3 Big Mistakes You’re Probably Making at Costco – The Motley Fool

A person walking down the street with a grocery bag while reading a receipt.

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How many of them are you making?


Key points

  • Costco is a popular membership-based retail store.
  • Many Costco members love its affordable prices and popular house-branded products.
  • Unfortunately, some members shop with the wrong credit card or buy the wrong brands.

Costco is one of several membership-based retail stores along with Sam’s Club and BJ’s. Many Costco members really love the store as a result of the savings it provides and the wide variety of high-quality products it offers. But unfortunately, some Costco members end up making mistakes that cost them money or leave important benefits on the table.

You don’t want to be one of those members that misses out on savings. And if you make sure to avoid these three common errors, you don’t have to be. 

1. Paying with a check, cash, or suboptimal credit card

Chances are, one of your big reasons for joining Costco is a desire to get the most bang for your buck. But if you’re using the wrong payment method, that won’t happen.

You’ll have a number of options for how to cover your Costco shopping costs, including paying with cash or check. But choosing either one of these payment methods means missing out on valuable credit card rewards that could effectively lower the cost of your purchases. It also means you’re less protected from fraud and may miss out on other purchase protections cards can offer, such as extended warranties. 

As long as you can pay your card balance on time and avoid paying interest on a credit card, you’re almost always better off charging your Costco purchases. 

Unfortunately, even people who use credit cards at Costco often pick the wrong one. See, Costco has its own branded credit card — a Costco Anywhere Visa® Card by Citi. It may seem like a no-brainer to use it for purchases at the warehouse club. The problem is, while you get 4% back on gas (on the first $7,000 per year and then 1% thereafter) and 3% back on restaurants — you only get 2% back on other Costco purchases and 1% everywhere else.

Since many of your purchases will come with a paltry 1% cash back rate, you may be better off with a different card that offers better rewards on the bulk of your spending. For example, the Wells Fargo Active Cash® Card could be a better choice. This card offers you unlimited 2% cash rewards on your purchases, plus you can easily earn a $200 cash rewards bonus after spending $1,000 in purchases within 3 months of opening the card. That means you’ll get the same 2% the Costco card offers when you shop at the membership club — but you also get the same cash rewards on other purchases you make outside of Costco, plus the sign-up bonus. 

2. Buying the wrong brands

One of the best perks of Costco membership is gaining access to Kirkland brand products. Kirkland is the Costco house brand, but often the products are exactly the same as its name-brand counterparts only they come at a substantial discount. 

Often isn’t always, though. You should always check the price of Kirkland products, but you don’t want to default to buying them in every situation. Instead, compare the per unit or per ounce cost on each item you’re purchasing to make sure you get the very best possible deal.

3. Passing up on lesser-known membership perks

Finally, failing to take advantage of all the perks your membership offers could mean you aren’t really getting the full value Costco can offer.

There’s a very long list of special savings you can get as a result of your Costco membership, including discounted insurance, affordable bottled water delivery, and prescriptions at a lower price than most pharmacies offer. Discounted restaurant gift cards are also sold at many stores, and Costco travel can even help you save on your next trip. 

Since you’re paying for a membership, missing out on all the savings you could be eligible for is a huge error and it’s one many people make. 

Fortunately, avoiding these mistakes is easy. Just research all the different perks you can get through Costco on its membership page; compare prices carefully when you shop; and be sure you have the right credit card in your wallet when buying online or in store. 

Sure, this is a little extra effort — but avoiding these mistakes could leave you with a lot of extra money in your pocket.

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