Amazon Prime prices are rising — is it worth keeping? Here’s our analysis – CNBC

It’s likely that you and nearly everyone you know has an Amazon Prime membership, or at least access to one. Statista estimates that more than 76.6 million households have an account, after all.

The popular subscription service will soon be increasing its pricing from $119 per year to $139 per year for all members. The new pricing already went into effect for new members on Feb. 18, 2022, while the updated rates for current Amazon Prime members will apply from March 25, 2022, on their next renewal date. Those paying for Prime on a monthly basis will see prices rise from $12.99 per month to $14.99 per month, while for those with Prime Student accounts, rates will jump $10, from $59 per year to $69 per year.

Having an Amazon Prime membership might seem like a right-of-passage — or sometimes an absolute necessity — but is it really worth an extra line on your monthly or yearly budget?

Below, Select breaks down the rewards, benefits and perks of having an Amazon Prime account, plus a few things to keep in mind if you’re on the fence about purchasing the service.

The subscription service is so well-received because of the many benefits it offers its members — most notably, perhaps, is its complimentary two-day (or sometimes faster) shipping perk. But as the cost of doing business continues to rise, companies including Amazon are also increasing their prices.

Amazon Prime pricing

Starting March 25, 2022, all current Amazon Prime members will pay the following rates when their membership is up for renewal (they’re already in effect for new members):

• $14.99 per month or $139 per year
• $8.99 per month for Prime Video

Those with Amazon Prime Student accounts can expect to pay the following rate:

• $7.49 per month or $69 per year

If you’re currently on a government assistance program such as EBT or Medicaid, you may qualify for a discounted Amazon Prime membership of $6.99 per month — click here to find out more.

No one can argue against the value that Amazon Prime delivers. JPMorgan analyst Doug Anmuth estimated the true value of an Amazon Prime membership to be worth around $1,000 if you were to fully price out each service.

Here’s a peek at some of the perks that come with Amazon Prime — visit the website to view the entire list of available benefits.

• Expedited shipping and delivery: With Amazon Prime, you’ll get faster shipping options, including complimentary two-day, one-day or same-day delivery, as well as two-hour delivery for groceries
• Video, music and game streaming + other digital services: You’ll get access to a wide variety of digital services, including Prime Video, Amazon Music, Prime Gaming (including Amazon’s new cloud gaming platform Luna), Amazon Photos (unlimited cloud photo storage) and discounts on Prime Video Channels, Amazon Music Unlimited and Amazon Kids+
• Shopping: You’ll score Prime Member deals at Whole Foods Market, early access to Lightning Deals, an option for Prime Try Before You Buy (for clothing, shoes, jewelry and other accessories) and free shipping on Woot, among other benefits
• Reading: Fans of digital books and audiobooks will get access to Prime Reading and Books with Audible Narration via Kindle and Audible and other perks through Amazon First Reads
• Other discounts: You’ll score free two-day and next-day shipping at shopbop, free expedited shipping from Zappos and access to major savings as part of Prime Day

Prime membership comes with a seemingly never-ending list of benefits, but how does it really stack up against similar services? Unfortunately, there aren’t too many ‘true’ competitors out there since Amazon Prime offers such a robust amount of perks, although that may not be the case for long as other retailers continue to launch and test their own subscription models. Here’s how it holds up against Walmart+.

Amazon Prime vs. Walmart+

Walmart+ offers a similar subscription model where you can have orders delivered quickly to your door. Walmart+ members receive the following benefits:

• Free next-day and two-day shipping on items from Walmart.com (with no order minimums), although that excludes most Marketplace items, location & freight surcharges
• Free same-day grocery delivery from your store when you spend at least $35 (based on availability)
• Discounts on prescriptions and the ability to save five cents per gallon at Walmart and Murphy gas stations
• A nifty Scan & Go feature to use when shopping in the physical store

Walmart+ costs $12.95 per month or $98 per year, which is moderately less expensive compared to Amazon Prime. If you’re the type of consumer who simply wants to receive your products as quickly as possible and prefers shopping at Walmart, without needing any of Prime’s additional benefits, Walmart+ may be a better fit. However, Amazon Prime offers similar shipping services and a much more widespread list of benefits for about $40 more per year.

If you’re unsure about whether or not Walmart+ is right for you, try signing up for a 30-day free trial. If you enjoy using the service and want to keep it for you, consider applying for the Platinum Card® from American Express, which offers a monthly statement credit if to cover the cost of Walmart+.

There is no service out there quite like Amazon Prime, which could make it a difficult decision to part ways with it, especially if you’re taking advantage of many of the benefits. Thankfully, there are a few ways you can save on your Amazon Prime subscription.

The simplest method is to split your subscription with friends and family. My family and I share the cost of our Prime account and use Venmo to pay one another. Instead of paying $139 per year, I end up paying only one third of that since we are splitting the cost three ways.

You may also want to consider applying for one of the Amazon Prime credit cards, each of which comes with immediate Amazon credits that can help offset the cost of the membership and earn you additional rewards on your purchases.

Lastly, CIT Bank is currently offering a promotion that lets you earn a complimentary year of Amazon Prime membership regardless of whether or not you’re a new or existing member, if you deposit $15,000 in a money market account.

Amazon Prime can be appealing to many types of consumers, including those who live in either urban and rural areas. It’s great for those who prefer shopping online rather than in person, those who want to keep their shopping all with one retailer, those who want free and quick shipping and for anyone who enjoys shopping at Whole Foods Market.

Even if only a few of Amazon Prime’s benefits appeal to you, their utility could make the cost of the service worth easily worth it. If you were to pay for even a few of the services individually you’ll likely be paying more than if you were just to subscribe to Prime itself.

That said, if you rarely order items online or aren’t interested in other Prime perks outside of quick shipping, you may be better off either paying the shipping cost per item or opting for a more affordable service like Walmart+. Alternatively, to be even more cost efficient, you could always ask a friend who already has an Amazon Prime account to order the product for you.

Doing the math

So, how do you consider subscribing to Amazon Prime and make the price seem ”worth it?”

On my regular, non-shared, non-Prime Amazon account, a pack of toothpaste would cost $5.99 to ship to my home in one day. If each order is going to add six more dollars in shipping costs, that means Amazon Prime would pay for itself in 23 orders, or an average of two orders per month.

With a Student membership, it makes even more sense to pay for Prime. Ordering a textbook for dental school, for instance, would cost an extra $7.64 in shipping charges, so you would have to order roughly 10 textbooks a year to make the service worth your while.

Shipping costs will vary depending on the item and how quickly you want it, but if you’re choosing two-day shipping often, you’ll likely come out ahead with Prime if you order online more than two dozen times a year. Remember that you also can get free shipping from Amazon without a Prime membership when your order has $25 or more of eligible items, however, your order will take five to eight days to be delivered.

If you value any of the other benefits outside of speedy shipping you’ll be even closer to Prime being worth it for you. Plus, if you’re using the Amazon Prime Rewards Visa Signature Card, Amazon Prime can quickly pay for itself with its 5% cash-back earnings on Amazon purchases.

Amazon Prime has now become a normal line item on most American consumers’ budgets as we’ve quickly adopted online shopping as a way of life. Whether you’re splitting the cost with your friends and family or using a rewards credit card to save on the membership cost, Amazon Prime is likely worth having if you shop online regularly. That said, if you’re currently paying for the service but rarely take advantage of its many benefits, this may be a good time to cancel your membership and save the $139 for your emergency fund instead.

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For rates and fees of the Platinum Card from American Express, click here.

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