Where to spend $1 coins
Finding ways to use them can be a challenge when you buy them in $250 increments.
The U.S. Mint's Circulating $1 Coin Direct Ship Program is back with several options -- Native American, Golden Dollars with Sacagawea, plus Presidents John Adams, Thomas Jefferson, James Madison, George Washington and Andrew Jackson -- meaning you can bust through some of those cash-back tiers on your credit card by purchasing money. These are regular-circulation coins available in increments of $250 or $500.
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In addition to killing cash-back tiers, I recommended buying dollar coins to help kill the penny and reduce our use of paper currency, which has a much shorter lifespan. I bought some of these dollar coins because of the reduced environmental impact. None of our cards have cash-back tiers.
We didn't want to go the route of depositing the coins at the bank because it's against the spirit of the program and because we want to see them go into general circulation. It doesn't bother me that some people are instantly depositing the coins, but that wasn't my goal. Our goal was to get them into the world so that we all use fewer dollar bills.
The tricky part is that they come in $250 increments -- you have to get creative in how you use them. Here's what I intend to do:
Farmers market. At the local farmers market, none of the vendors take credit cards. It's partly because they're set up in the parking lot of our local library but also because of the fees merchants have to pay for accepting credit cards. Whenever I go to the farmers market, I always take change from my charge jar because it's a chance for me to run through all that loose change. By bringing along a few dollar coins, I don't have to sort through quarters to pay for things. Also, the vendors always appreciate getting change because they hate having to sell a $3 box of green beans only to have the buyer hand them a $20 bill.
Stores you like. When you use a credit card, the merchant is charged a transaction fee. The fee is usually about 2% or 3%, which can really eat into the profit margins of the smallest of stores. So, if there is a local store that you like and you want to give it a hand, why not get some $1 coins from the U.S. Mint and use those instead of credit? You still get whatever cash back you'd get with a credit card (because you purchased the coins with your credit card) and you also save the vendor some money. With the recession cutting into everyone's wallet these days, shaving a few bucks off the store's expenses each month certainly helps them out.
Small purchases. The next time you head to the grocery store or local convenience store to make a small purchase, take a few dollar coins in your pocket. Sometimes I feel silly pulling out a credit card to pay $2.19 for a couple bottles of Gatorade (it's mostly to avoid getting 81 cents in change) but it's a prime example of where using dollar coins and taking the change means I'm done with the purchase a lot faster. Sure, I have to take the 81 cents in change, but it's small price to pay.
Ultimately, it comes down to looking at your regular purchases and trying to find places where you have no choice, or prefer to pay with cash. The coins themselves are quite fun: "E Pluribus Unum" is inscribed on the edges, giving it a very European feel. I really hope dollar coins take off because the idea of replacing billions in paper bills every 18 months, rather than 30 years for coins, is very unappealing to me. Plus, when you think about it, coins are probably cleaner given their hard surface compared with the porous cotton paper mix of bills.
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