Posted by Mike Smith :: March 6, 2008 @ 4:32 am

On February 11, 2008, the United States Postal Service (USPS) announced an increase in postage rates. Along with other increases, the cost of a 1st class stamp will be raised to $0.42 on May 12th.

The Postal Service is authorized by The Postal Accountability and Enhancement Act to adjust prices each May. The good news is that the Act also limits increases to be no more than inflation, as measured by the Consumer Price Index. That basically means that postal rates, at worst, can only stay at their current relative cost. As some increases may be below inflation, the average relative cost of postage will actually decline.

Here are some of the other rates:

Now may be a good time to stock up on Forever Stamps. These 1st class stamps, currently priced at $0.41, may be used in place of the new $0.42 stamps. Generally, being able to buy something now that will have a higher value later is seen as in investment. This thinking has led some to believe that they can invest in Forever Stamps to make a quick profit. While buying these stamps ahead of a rate increase is a great way to save some money, see my post that describes why Forever Stamps are not good as an investment.

For people looking for a real investment, a person-to-person loan portfolio from Lending Club is a better way to go. With lender returns averaging 12%, you can get much better rates on Lending Club than with your savings accounts or CDs.