Amazon boosts monthly Prime membership fees by 20 percent

Amazon is raising monthly prime membership costs by nearly 20 percent

Amazon is raising monthly prime membership costs by nearly 20

Amazon did not give an exact reason for the increase, although a spokesperson told CNET it was because of the "tremendous appetite" of customers for two-day shipping and the other perks of the membership.

If you're a monthly Amazon Prime subscriber, prepare to pay more. That's an 18% hike from the previous price of $10.99. The $2 price hike will bring the total annual cost to $156 instead of $132, a $24 increase.

As of today, if you're paying the monthly rate for Amazon Prime in the U.S., expect to pay $12.99 during the next billing cycle beginning on February 18. The annual subscription fee remains the same at $99. However, subscribers who pay for Prime annually will continue to pay $99 per year. Amazon Prime Student members will continue to pay the $49 annual fee. Amazon will keep the month to month Prime participation for customers on government help at $5.99.

Obviously, the annual membership is a much better deal for anyone maintaining a Prime subscription over the course of 12 months or more.

The increase will impact Amazon's student pricing as well.

IBD'S TAKE: Amazon has been a big victor, with the stock up 62% in the past 12 months. Students who were paying $5.49 per month for access to Prime will now be charged $6.49.

Amazon is looking to repeat the success of its Prime programme for consumers by introducing Business Prime Shipping for Amazon Business customers in the USA and Germany. Prime members spend considerably more on Amazon than non-Prime members. There are an estimated 90 million households using the service, an increase of 30 percent year-over-year.

In September of past year there were around 90 million prime subscribers in the USA, according to Statista research.

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