How many of them are you doing?
- Costco is a popular membership-based retail store.
- Many Costco members love their affordable prices and popular brand name products.
- Unfortunately, some members buy 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 love the store as a result of the savings it offers 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 significant profits on the table.
You don’t want to be one of those members who misses out on savings. And if you make sure to avoid these three common mistakes, it doesn’t have to be.
1. Paying with suboptimal check, cash, or credit card
Chances are, one of your main 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 on how to cover your Costco shopping costs, including paying with cash or check. But choosing any of these payment methods means missing out on valuable credit card rewards that could effectively reduce the cost of your purchases. It also means you’re less protected against fraud and may miss out on other purchase protections cards may offer, like extended warranties.
As long as you can pay off your card balance on time and avoid paying interest on a credit card, it’s almost always better to charge your purchases at Costco.
Unfortunately, even people who use credit cards at Costco often choose the wrong card. You see, Costco has its own brand name credit card: a Costco Anywhere Visa® Card from Citi. It might seem like a no-brainer to use it for warehouse club purchases. The problem is, while you get 4% back on gas (on the first $7,000 per year and then 1% thereafter) and 3% on restaurants, you only get 2% on other Costco purchases and 1% elsewhere.
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 most of your spending. For example, the Wells Fargo Active Cash® Card might be a better option. This card gives you unlimited 2% cash rewards on your purchases, plus you can easily earn a $200 cash rewards bonus after you spend $1,000 on 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’ll 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 benefits of being a Costco member is having access to Kirkland brand products. Kirkland is Costco’s house brand, but often the products are exactly the same as their brand-name counterparts, only they come at a substantial discount.
However, it often is not always. You should always check the price of Kirkland products, but you don’t want to buy them by default in every situation. Instead, compare the cost per unit or per ounce of each item you’re buying to ensure you’re getting the best deal possible.
3. Passing up lesser-known membership perks
Finally, not taking advantage of all the benefits your membership offers could mean you’re not really getting all the value Costco has to offer.
There’s a 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 price lower than most drug stores offer. Discount 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, losing all the savings you might be eligible for is a big mistake and one that many people make.
Fortunately, avoiding these mistakes is easy. Just research all the different benefits you can get through Costco on their membership page; compare prices carefully when shopping; and make sure you have the correct credit card in your wallet when you shop 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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