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If you join Costco, you’ll pay $65 to get access to all of the deals the warehouse club has to offer with a Gold Star membership. Or you can double that amount and pay $130 for an upgraded Executive Membership. In either case, it pays to maximize your Costco membership.

Being an Executive member sounds a lot nicer than just being a Gold Star member. But there’s only one reason why you should choose the upgrade.

Joining Costco’s Executive membership only makes sense in this situation

Becoming an Executive member is a smart move if, and only if, you will earn enough money in cash back to pay off the extra membership costs.

See, when you become a Costco Executive Member, you get 2% back on qualifying purchases. If you spend enough that the 2% you get back adds up to at least $65, then you’ll have paid for your upgrade; you break even.

If you spend more than that amount, becoming a Costco Executive Member actually improves your financial situation since you’ll get more back than you paid for the upgrade.

How much do you need to spend exactly? If you spend $3,250 a year at Costco, then you’ll earn $65 back, assuming you qualify for the 2% cash back on all of those purchases.

If that happens, your Executive membership upgrade is essentially free. If you spend less than that on purchases that count for the 2% cash back, then you’ve paid too much for a membership that didn’t justify its value.

The good news is that if the Costco Executive membership isn’t right for you, you can still earn cash back at Costco. You can do this by signing up for a credit card that provides it. Click here for the best credit cards for Costco, including those offering extra cash back bonuses on warehouse club purchases.

You can sign up for one of these cards today to start getting back some of what you spent at Costco — without having to buy an upgraded membership. In fact, instead of shelling out cash to become eligible for cash back, you may even qualify for a new cardmember bonus that gives you extra money for signing up.

What about other Costco executive membership features?

Now, it is true that the Costco Executive membership comes with other perks besides just the 2% back.

However, those other perks are pretty underwhelming and they simply aren’t going to provide the vast majority of people with enough value on their own to justify spending an extra $65 per year on an upgraded membership.

Here are a few of Costco’s Executive Member benefits beyond the 2% back:

• Discounted auto, pet, and homeowners insurance
• Extra savings on the Costco auto program
• Cheaper bottled water delivery

Just ask yourself when was the last time you bought a car from a Costco partner, got bottled water delivery, or purchased insurance coverage from Costco. If the answer is never, and is likely to stay that way, these “benefits” won’t provide any real value. Whether the Executive membership makes sense comes down to whether you can earn at least $65 back.

The good news is, if you signed up for an Executive Membership and you’re now realizing you made a mistake because you won’t spend enough to pay for it, you can downgrade at any time and get a refund when you do. Do this if you find your Costco Executive membership simply won’t pay off for you

Top credit card to use at Costco (and everywhere else!)

We love versatile credit cards that offer huge rewards everywhere, including Costco! This card is a standout among America’s favorite credit cards because it offers perhaps the easiest $200 cash bonus you could ever earn and an unlimited 2% cash rewards on purchases, even when you shop at Costco.

Add on the competitive 0% interest period and it’s no wonder we awarded this card Best No Annual Fee Credit Card.

Click here to read our full review for free and apply before the $200 welcome bonus offer ends!

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Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.