When was the last time you mailed a letter? Even if it’s been a while, you might want to pay attention. On Sunday, July 14, the cost of a stamp rose for the second time this year, rising by 5 cents for first-class postage to 73 cents.
Many people may not notice or care — after all, being concerned about 5 cents isn’t precisely a millionaire move — but this price hike affects you more than you realize.
While most people no longer use mail as frequently, postage prices affect millions of businesses and organizations — the vast majority of the $40.8 billion annual mail expenditure.
When these companies cut back, it directly impacts the U.S. Postal Service's budget and ability to provide essential services, like delivering online purchases, prescription drugs, and election ballots.
Read on to learn more about the postage hike and why some experts are concerned about the USPS's future viability.
Earn cash back on everyday purchases with this rare account
Want to earn cash back on your everyday purchases without using a credit card? With the Discover®️ Cashback Debit Checking account (member FDIC), you can earn 1% cash back on up to $3,000 in debit card purchases each month!1
With no credit check to apply and no monthly fees to worry about, you can earn nearly passive income on purchases you’re making anyway — up to an extra $360 a year!
This rare checking account has other great perks too, like access to your paycheck up to 2 days early with Early Pay, no minimum deposit or monthly balance requirements, over 60K fee-free ATMs, and the ability to add cash to your account at Walmart stores nationwide.
Don’t leave money on the table — it only takes minutes to apply and it won’t impact your credit score.
Apply for a Discover Cashback Checking account today
Impact on businesses and organizations
![african american woman checking mail outdoors](https://cdn.financebuzz.com/filters:quality(75)/images/2024/03/29/african-american-woman-checking-mail-outdoors.jpeg)
The postage rate hike is a big concern for businesses and organizations that rely heavily on mail — and ultimately gets passed down to you, the consumer.
When these prices rise, many businesses, from those who send junk mail to magazines, cut back on their mailing activities, which puts USPS’s budget in jeopardy and makes it harder for them to provide essential services.
The history of stamp prices
![vintage animal stamps](https://cdn.financebuzz.com/filters:quality(75)/images/2024/07/02/vintage-animal-stamps-adobe.jpg)
Historically, postage rate increases were tied to inflation and typically occurred once a year. However, Sunday marks the sixth increase in three years, with first-class stamp prices rising ten percentage points faster than overall inflation.
Major mailers argue that these frequent hikes drive them away from the USPS, reducing revenue rather than increasing it.
Michael Plunkett, the CEO of the Association for Postal Commerce, says the rapid rate increases are causing a decline in mail volume that may never return.
Get a protection plan on all your appliances
Did you know if your air conditioner stops working, your homeowner’s insurance won’t cover it? Same with plumbing, electrical issues, appliances, and more.
Whether or not you’re a new homeowner, a home warranty from Choice Home Warranty could pick up the slack where insurance falls short and protect you against surprise expenses. If a covered system in your home breaks, you can call their hotline 24/7 to get it repaired.
For a limited time, you can get your first month free with a Single Payment home warranty plan.
Mail usage has gone down — but we send more packages than ever
![multiple cardboard box packages](https://cdn.financebuzz.com/filters:quality(75)/images/2024/01/09/multiple_cardboard_box_packages.jpg)
Digital communication, like e-mail, has significantly reduced the volume of individual letters. The USPS delivered 11.4 billion individual letters in the past year, a 75% decrease from two decades ago.
While online shopping has increased package deliveries, the USPS faces stiff competition.
Experts like Kevin Kosar from the American Enterprise Institute point out that the USPS no longer monopolizes package delivery which is a highly competitive market.
Get a protection plan on all your appliances
Did you know if your air conditioner stops working, your homeowner’s insurance won’t cover it? Same with plumbing, electrical issues, appliances, and more.
Whether or not you’re a new homeowner, a home warranty from Choice Home Warranty could pick up the slack where insurance falls short and protect you against surprise expenses. If a covered system in your home breaks, you can call their hotline 24/7 to get it repaired.
For a limited time, you can get your first month free with a Single Payment home warranty plan.
Financial struggles and modernization efforts
![usps worker getting inside the van](https://cdn.financebuzz.com/filters:quality(75)/images/2022/11/04/usps-worker-in-van.jpeg)
The USPS has been in a "financial death spiral" for years, leading to a 10-year modernization plan initiated in 2021 under Postmaster General Louis DeJoy.
While this plan aimed to revitalize the service through network restructuring, full-time staffing, improved transportation, and technology investments, the USPS still faces significant financial losses — with a projected $6 billion deficit this year.
Critics worry that the plan may compromise service reliability and that a financially self-sustaining, universal postal system may never exist.
Bottom line
![](https://cdn.financebuzz.com/filters:quality(75)/images/2015/12/01/usps-796059_1280.jpg)
For consumers, the increase in postage rates might seem negligible, but it has broader implications. Rising costs can affect the reliability and efficiency of mail services that many still rely on for important deliveries, such as prescription medications and election ballots.
And while the shift from traditional mail to digital communication means fewer people use postal services, this could lead to more frequent rate hikes as the USPS tries to cover its expenses. As consumers, understanding these changes can ultimately help the USPS’s financial health.
More from FinanceBuzz:
- 7 things to do if you’re barely scraping by financially.
- Are you a homeowner? Get a protection plan on all your appliances.
- 6 genius hacks Costco shoppers should know.
- Learn how you can escape the paycheck-to-paycheck grind.
Lucrative, Flat-Rate Cash Rewards
FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.
Wells Fargo Active Cash® Card
Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases
Benefits
- Low spend threshold for its welcome offer — $200 cash rewards bonus after spending $500 in purchases in the first 3 months
- Cell phone protection benefit (subject to a $25 deductible)
- Can redeem rewards at an ATM for literal cash
Drawbacks
- Foreign transaction fee of 3%
- No bonus categories
- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 20.24%, 25.24%, or 29.99% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don’t expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.