Image source: Upsplash/The Motley Fool

When I first heard you had to pay $60 to get a basic membership at Costco, I was skeptical the store would help me save enough to justify adding another annual expense to my budget. But, now that I'm a member, I've discovered multiple ways to earn back the cost of a membership in a single purchase.

One of those is buying a smartphone through Costco. Although Costco doesn't have a huge selection of phones, it offers great savings through its partnerships with AT&T and T-Mobile. If you're in the market for a smartphone, here are some reasons you might want to check out Costco's deals.

1. Costco members get extra discounts for new plans and phones

If you're in the market for both a smartphone and a new plan, Costco might give you an extra discount for enrolling with one of its partner carriers, AT&T or T-Mobile.

For example, you can get up to $350 off an eligible smartphone when you switch to AT&T from an eligible third-party carrier and purchase the phone on a 36-month 0% APR plan. It will also waive the $35 activation perk for Costco members only. Meanwhile, T-Mobile and Costco offer a combined $400 off when you activate a new line with a Go5G plan (other terms may apply).

Those are two of the best deals you'll find for a new plan and phone. But read the fine print first to see what the deal entails. For example, the T-Mobile discounts says $400 off, but what it means is that you'll get a $250 prepaid Visa Card to use at T-Mobile or Costco and a $150 Costco Shop Card. Meanwhile, the AT&T isn't a flat $350 off, but rather a $100 Costco Shop Card and a $250 discount spread out over 36 months. In this way, you'll get $6.95 off your smartphone for every month during your 36-month installment plan. Your savings will eventually come out to $350, but it doesn't all come at once.

If you're okay with those conditions, the $350 and $400 savings are hard to beat. You can also trade in your old smartphone to get money off your new one. All in all, it can be a good deal, especially if you're willing to switch to a new carrier.

2. Low prices on new iPhones

If you don't need a plan, you could always buy an unlocked iPhone. To be sure, Costco doesn't have a huge selection of iPhones. In fact, if you're shopping online, you can only purchase the iPhone 15 Pro and iPhone 15 Pro Max. Even so, Costco's prices are slightly lower compared with Apple.

These are just the face prices, however, and don't take into account discounts from trade-ins or cash back you might get with the right credit card. If you plan to trade in your iPhone for a new one, I would recommend getting a trade-in value from both Costco and Apple, as Apple typically gives higher trade-in values than Costco does.

3. Longer return policy than most phone carriers

Costco gives you 90 days to return your smartphone, which is significantly longer than most phone carriers. For instance, T-Mobile and AT&T both give you 14 days, while Verizon gives you 30 days.

Having more time to return your smartphone ensures that any hidden manufacturing problems can manifest before the policy runs out. On the flip side, you might have to pay a restocking fee for some smartphone returns. For example, you might have to pay a $55 fee for some phone purchases made on an AT&T plan.

All in all, if you're in the market for a new smartphone, Costco might provide you with the best way to save money. Toss in the fact that you can also buy many phone accessories for cheap -- like headphones and headsets -- and you could keep even more in your savings account.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Apple, Costco Wholesale, and Visa. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.