Amazon Hikes Monthly Prime Membership Fees By 20%

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The annual cost of Prime, which includes two-day shipping and video streaming, was unchanged at $99.

The new prices are now live on the Amazon Prime subscription page.

About a quarter of Prime members opt for the monthly service, last year.

Amazon has increased its monthly Prime membership fee from $10.99 to $12.99, an increase of 18 percent. Qualifying college students will pay $6.49 a month, up from $5.49.

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Prime subscribers tend to do more shopping with the company.

Amazon said it has invested in making Prime more valuable to its members, making more items eligible for Prime shipping and increasing the video offerings. If every one of those members subscribes monthly for an entire year, this rate increase will mean over $34 million more in Amazon's pockets.

The increased prices become effective on January 19 for new subscribers, while existing subscribers will experience the higher rates starting February.

Amazon said its $5.99-a-month Prime membership for low-income people who receive government assistance is not affected by the price increase. Amazon may be hoping that customers who switch from monthly to annual payments will also have increased purchasing activity to make the most out of the year-round membership.

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