Amazon raises monthly Prime subscription 18 percent

From CNET: If you pay for Amazon Prime membership on a monthly basis, get ready to pay a little more.

The online retailer on Friday said it raised the monthly fee for Prime to $12.99 from $10.99, up 18 percent and effective immediately. The monthly student rate increased to $6.49 from $5.49. Customers using the monthly option will start paying the higher price on their first payment after Feb. 18.

The good news is that if you pay for Prime annually, whether the $99 full price or $49 student rate, your costs won't increase. The monthly option for customers using government aid didn't change either.

Prime customers, now estimated to reach 90 million US households, routinely spend about twice as much on Amazon as non-Prime shoppers. With Prime serving as Amazon's engine for retail sales and customer loyalty, any price hikes come with risk of a blowback from consumers. But, with Amazon's shipping costs constantly increasing, the e-commerce giant also needs to balance customer satisfaction against its own bottom line.

An Amazon spokeswoman said the increase resulted from Prime members' "tremendous appetite" for Prime benefits including unlimited two-day shipping, as well as Amazon's continued investment in Prime perks.

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