Cheap Costco gas is a huge perk for its members, especially since its fuel prices are usually significantly lower than local gas stations. I recently let my annual Costco membership lapse, and while I occasionally used the cheap gas perk, it wasn’t nearly often enough to justify the membership fee.
Here’s what you should consider if you have a Costco membership just for the gas and why it could cost you more than you think.
1. The gas perk could be causing you to impulse buy
This is probably the biggest hidden cost for most Costco members. Even if you go to Costco just to buy gas, it’s likely you’ll go into the store at least sometimes to make the trip worth your time.
And once you’re inside, it’s easy to overspend. Costco expects this and its CEO Ron Vachris said recently that some members like to “treasure hunt,” looking for a good deal, and added that “people come in to spend $100” but walk out spending $300.
I was recently in a retail store for a computer sale, and the heavily discounted TVs caught my eye. I’m not an impulse shopper, but I came very close to bringing one home with me that day. It didn’t help that my kids were trying to convince me, too.
Costco expects that some members who come to the store just for gas will pick up a few impulse items before heading home. There’s nothing wrong with finding a good deal, but it could end up busting your budget if all you needed was a tank of gas.
2. You have to drive too far
One of the main reasons why I didn’t renew my Costco membership was because the closest store location isn’t on the way to many places I visit, and is on a road that quickly gets congested.
But driving far out of my way and sitting in traffic just to fill up my car with cheap gas kind of defeats the purpose of the discount.
A gallon of unleaded fuel at a gas station two blocks from my home is $0.38 more per gallon than the nearest Costco station. Admittedly, that’s a huge per-gallon savings. But I have to admit that I’d rather drive the 30 seconds it’ll take to get to my local station rather than the 30 minutes (there and back) to Costco.
3. The lines are too long
This one depends on how many people live near you and have Costco memberships. Still, it’s fairly common for Costco fuel stations to have long lines. Sometimes, you can move through the line pretty quickly — but other times, you can get stuck waiting.
A quick fix to this is to try to fill up when other members aren’t there, ideally during the middle of the day. But if you constantly find yourself sitting in gas lines at Costco on a Saturday, the discounted gas may not be worth it.
4. You’re not earning enough gas rewards
Costco members who upgrade to the Executive membership (which costs $130 annually) can earn 2% cash back on most Costco purchases. Unfortunately, the cash back offer doesn’t extend to gas purchases. If you want to earn gas rewards, you’ll need to have a Costco credit card.
If you already have a non-Costco gas credit card that earns cash back at local stations, you can save on gas without needing a Costco membership. However, some gas credit cards may not allow you to earn cash back at discount clubs, including Costco fuel stations.
I’ve benefited from Costco’s discount gas, but I’ve found getting it to be inconvenient at the same time. While everyone can appreciate cheaper gas prices, you might want to consider if you’re impulse buying at Costco when you go fill up. If so, this Costco perk might not help you save after all.
