Postage Stamps to Cost More

Mailing a letter will cost a little more next year.

The cash-strapped U.S. Postal Service announced Tuesday plans to increase postage rates starting Jan. 22, 2012.

The U.S. Postal Service is facing losses in the billions.

First class stamps will rise one cent to 45 cents. But that's not all that will cost customers more.

Postcard postage will increase three cents to 32 cents and letters to Canada and Mexico will jump five cents to 85 cents. Mailing letters to other international destinations will cost seven more cents to $1.05.

The last increase to the postage stamp was in 2009.

According to the law, The Postal Service cannot raise prices more than the rate of inflation, which is 2.1 percent. Last year, the Postal Regulatory Commission denied the Postal Service the special request to raise prices more than the rate of inflation.

In the fiscal 2010 year, the Postal Service lost $8 billion, compared to $3.8 billion loss the prior year. Up to the 2010 fiscal year, mail volume declined 20 percent.

Figures are expected to worsen when the review for 2011 fiscal year is released next month. It has been speculated that the agency will be broke by 2012.

Hundreds of thousands of postal workers may lose their jobs or face drastic changes to their benefits.