Costco has two membership tiers. You can become a Gold Star member for $60 a year. Or you can upgrade to the Executive membership for $120 a year. While both memberships share some common traits, including access to the warehouse club, there are important differences between them as well.

Deciding which one is better for you isn't always easy, but if you're currently a Gold Star member, you should watch for these signs that suggest an upgrade is worth it.

1. You're spending at least $3,000 a year at Costco

If you spend at least $3,000 per year at Costco, there's no question about it. You should upgrade to an Executive membership. This membership tier comes with an annual 2% reward on qualifying Costco purchases. You can earn up to $1,000 per year in total cash back.

A little quick math shows that if you spend at least $3,000 at Costco annually, a 2% reward would equal $60. That's enough to cover the upgrade to the Executive membership, which makes it essentially free. Each additional dollar you spend on top of that will net you bonus cash back that puts more money in your pocket.

2. You're booking a trip through Costco travel

Costco has an awesome travel service that allows you to score bargains on trips across the globe. Any Costco member can book travel, but Executive members get to earn the 2% rewards  mentioned above when they do.

Not only do you get the bonus cash back, but many vacation packages offer additional special deals to Executive members. For example, if you book a vacation package at the Hyatt Regency Grand Reserve Puerto Rico and you're a Costco Executive member, you'll get a $100 resort credit to use on your trip.

Similar upgrades for Executive members are also offered at around a dozen other destinations including packages in the Dominican Republic, Puerto Vallarta, Cook Islands, and more. The added benefits you get can more than cover the extra $60 you're paying for an Executive membership.

3. You're buying insurance coverage

Costco offers a variety of options to help you get insurance coverage, including pet insurance, auto insurance, and homeowners insurance.

Executive members who get covered through Costco are entitled to extra benefits when they put their protection in place. For example:

• Executive members will get their $15 enrollment fee waived if they sign up for Figo Pet Insurance coverage.

• Free roadside assistance is provided to Executive members who sign up for auto insurance coverage.

• Insurance buyers with Executive membership will be eligible for lifetime renewability.

• Home glass repair reimbursement is available to Executive members who buy homeowners insurance coverage.

• You can get Home Lockout Assistance if you're an Executive member who buys home insurance through Costco.

These additional perks can provide significant value and are, by themselves, often worth paying the extra $60 to upgrade to Costco's higher-tiered membership plan.

Remember, you get to take advantage of all of these benefits when you upgrade your membership -- as well as other discounts on partner services, as well. There's plenty of reasons to give Executive membership a try.

The good news is, if you aren't satisfied, Costco will allow you to downgrade or cancel your membership at any time and receive a refund. So if you regret becoming an Executive member, you can alway drop back down to the Gold Star tier.

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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent 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 recommends Hyatt Hotels. The Motley Fool has a disclosure policy.

3 Signs Upgrading Your Costco Membership Is Right for You was originally published by The Motley Fool