I think the thing most don't understand is that Costco offers you the Costco Citi Bank card. You can use that card everywhere you go (Restaurants, gas stations, hardware stores, airlines, and everywhere else). You earn money from every purchase you make, and then pay the balance off each month.
At the end of the year, Costco cuts you a check for all your money earned (Mine has never been less than $250, and is currently at $257, and half the year still ahead), and you can either spend it shopping at Costco, or go in and buy a $10 item (Or nothing at all), and they pay you the rest in cash. That's a minimum of $250 of free money for shopping at places I would normally go to anyway.
The way I see it is, I save enough with Costco's low prices alone to pay for the membership. The big bonus check at the end of the year is simply a free gift. I have never paid a dime of interest on that charge card in the last 16 years, and they have paid me a bundle. Some things may seem too good to be true, but this one is the real deal.