Amazon Is Increasing the Cost of a Prime Membership by 20%

Amazon is set to increase the price of your Prime membership next month. On Thursday, Amazon announced that it'll increase the price of Prime subscriptions by just more than 20%, beginning May 11, 2018 — from $99 per year to $119.

The internet giant disclosed that more than 100 million people are Prime members. During a conference call following its first-quarter earnings report on Thursday, the company's Chief Financial Officer Brian Olsavsky said that it was forced with increasing the cost of a membership, meaning an extra $2 billion for Amazon.

"The value of Prime to customers has never been greater," Olsavsky said. "And the cost is also high, as we pointed out especially with shipping options and digital benefits, we continue to see rises in costs. So, effective May 11, we're going to increase the price of our US annual plan from $99 to $119 for new members."

Current Prime members who renew after June 16 will have to pay the new, higher rate. If you're a current Prime member who renews your membership before that date, you'll be able to do so at the $99 rate.

This move from Amazon is the first time the retailer has raised the price of a Prime membership since 2014, when the annual membership increased from $79 to $99. Similar to this increase, the last was also a $20 raise.

Amazon cites new features as the reason for the increase. Prime membership comes with a number of benefits, including free two-day shipping on many items, as well as access to Amazon's streaming service. With the growing number of companies that Amazon is buying, it could also be adding new Prime benefits going forward. For example, when it makes Whole Foods perks exclusive to Prime members.

Amazon also offers up to 5% back on Whole Foods purchases with its Amazon Prime Rewards Visa Card from Chase. The card also offers up to 5% back on Amazon.com purchases.