First-Class Postage Going Up Again, Soon

Forever stampBack in February, the U.S. Postal Service announced that the postage for one-ounce first-class mail will go up by 1 cent to 42 cents next Monday, May 12th, so does the price for a Forever stamp.

When the stamp was first introduced in 2007, I didn’t buy any extra other than the booklet of 20 when I was out. The main reason for not stocking up on the stamps that never expire was after gradually moving from paper checks and mail to online billpay over the past couple of years, we are using much less stamps now than before. In fact, there are only a couple of regular items need to be mailed in every month. And except bills, we don’t many letters to send (who is still sending letter anyway?). So I feel even if the postage keeps going up every year, the money we save by stocking up Forever stamps won’t be significant if we only use one book a year.

The following is a chart of U.S postage rate history from 1863 on Wikipedia. Clearly, the pace of postage increase has accelerated since this century began. During the 1990s, there were 3 adjustments that resulted in a net increase of 8 cents. So far this decades, 5 adjustments have already been made and the postage has gone up from 33 cents in 1999 to the latest 42 cents due to higher inflation (using historical inflation data from 1999 to 2007, the postage should be at 42 cents in 2008, see table below), though the inflation adjusted price 145 years ago was actually higher. So one benefit I can see from buying Forever stamps is: You will keep pace with the inflation!

postage_rate.png

Year Inflation rate Postage rate after inflation(cents)
1999 2.85% 33.94
2000 3.24% 35.04
2001 3.39% 36.23
2002 2.68% 37.20
2003 2.27% 38.04
2004 1.59% 38.65
2005 2.83% 39.74
2006 3.38% 41.09
2007 2.19% 41.99

Then last weekend, when I was checking out at Costco, I saw the sign that they also sell Forever stamps. Suddenly, I decided to buy some. So I ended up getting 200 stamps and when I got home, I enrolled in the automatic payment program at PSE&G, our electricity provider, eliminating one more piece of mail! That’s one less stamp we have to use. Now, the only payment we need to mail in is the monthly fee to the homeowner association. Maybe that 200 stamps can last 10 years :D

BTW, if you stamps at Costco, you actually can get a discount because the book of 100 stamps cost me only $40.75, instead of $41 :)

Update January 4, 2011: The proposal for increasing the first class stamps by 2 cents was denied. However, the post office is allowed to raise first-class rates by an amount not exceeding the annual inflation rate without approval, which means the cost for mailing a first class letter will go up 1-cent from the current rate of 44 cents. The rate had been expected to go up in February 2011.

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6 Responses to “First-Class Postage Going Up Again, Soon”

  1. Lazy Man and Money |  May 06, 2008 at 4:59 pm

    I bought 100 stamps a couple of months from Costco — they weren’t forever stamps. We happen to use a lot of stamps – even with bill pay. We still have around 50 left. Costco was not a bargain for us.

  2. Nathan |  May 07, 2008 at 10:07 pm

    Not sure you know this but the way rates are set has changed and the post office is expected to raise rates every year (like UPS / FEDEX and other shipping services do).

  3. Sun |  May 10, 2008 at 6:25 pm

    Lazy: You should have bought the Forever stamps since you used a lot and the Forever stamps won’t cost you more than the regular stamps. Now you have to buy 50 1 cent stamps :)

    Nathan: Adjusting every year is fine, as long as the pace doesn’t exceed inflation rate.

  4. Ken Little |  Mar 06, 2009 at 5:14 pm

    It bothers me to know USPS BUYS EXPENSIVE HOMES FOR SOME OF ITS EMPLOYEES AND LETS US PAY FOR THEIR HOUSE. hOW CAN i GET IN ON THIS GRAVY TRAIN?