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Is the price of a 'forever' stamp going up in 2021?

MoneyWise logo MoneyWise 12/29/2020 Sigrid Forberg
a close up of a cake: Is the price of a 'forever' stamp going up? © Kate Ter Haar / Flickr Is the price of a 'forever' stamp going up?

The U.S. Postal Service has announced that postage rates will be increasing in the new year — with one big exception.

The price of a "forever" stamp, used on the standard first-class letter, stays at 55 cents in 2021.

The forever stamp rate has been at 55 cents since Jan. 27, 2019. The price will hold steady even as other postage rates increase by up to 1.8% in late January 2021.

"The Postal Service has some of the lowest letter-mail postage rates in the industrialized world and continues to offer a great value in shipping," the agency says in a news release.

How do forever stamps work?

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Forever stamps were introduced by the Postal Service in 2007 and are intended for use on regular, or first-class, letters. The very first forever stamp featured the image of the Liberty Bell.

Since 2011, all 1-ounce first-class stamps have been forevers.

Regardless of how much you pay for a forever stamp, you can use one to send a regular letter (no heavier than an ounce) forever. So if a stamp was worth 49 cents when you bought it and the price of mailing a letter has since gone up to 55 cents, you can still use that old stamp.

Forever stamps are sold in sheets, rolls and booklets of 20. You can buy them in person at your local post office or from the USPS over the phone or online. Some grocery stores and chain drugstores also sell forever stamps.

You can pick some up when you do your food shopping. Use an app that gives you cash back simply for snapping a photo of your grocery receipt, and you might earn enough to buy stamps for a year, depending on the amount of snail-mailing you do.

How much is a forever stamp in 2021?

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In the fall of 2020, the Postal Service announced it would keep the price of a forever stamp — and the first-class letter rate — at 55 cents for 2021.

But other first-class mail rates are going up 1.8%, and alternate categories of mail will cost 1.5% more. The changes take effect on Jan. 24, 2021.

Here are a couple of examples of the price hikes: A letter that's overweight will cost 20 cents for each additional ounce, up from the current 15 cents. The price of mailing a postcard within the U.S. will increase from 35 cents to 36 cents.

Postal officials say in the news release that they believe these new rates will help keep the Postal Service competitive while providing some needed revenue.

How many forever stamps do I need?

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Within the U.S., you need only a single forever stamp to send a regular-sized letter. The stamps are always sold at the same price as regular first-class postage.

But if you’re sending an oversized letter or mailing something internationally, you can use a forever stamp, but you’ll need to attach additional postage. Your forever stamp will be worth the domestic first-class-mail letter price the day you use it.

You might use two or more forever stamps on letters that are weightier or are going to international destinations, but that may not be the best strategy.

Again, an additional ounce will cost you 20 cents starting in late January. So if you've got a letter weighing in at close to 2 ounces and you add another forever stamp worth 55 cents, you’ll be paying $1.10, not the required 75 cents. That's paying 35 cents too much.

It's better to save your forever stamps for regular mail and buy a mix of stamps in smaller and larger denominations to help you hit the higher rates on oversized and international letters and cards.

Why do we have forever stamps?

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Postage prices are roughly tied to inflation. The U.S. Postal Service requests rate increases as inflation rises, meaning prices at the post office go up most years.

A good deal of the USPS' revenue comes from stamps — so why does it want you using older forever stamps when rates go up? Wouldn't it make more sense for the agency to make and sell new stamps with higher values?

Well, it turns out that the increased revenue from offering new, costlier stamps would be more than offset by the expense of having to collect and destroy outdated stamps each time the postage rate changes.

With forever stamps, everyone wins. You can buy a stockpile of stamps when rates are set to go up and save yourself those extra cents. You might even invest those small savings using a popular stock trading app that allows you to buy fractions of shares with as little as a $1.

Meanwhile, the Postal Service wins because it will never have to track down "expired" postage.

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