US Ends Penny Production: What It Means for You

Understanding the Impact of Ending Penny Production

The US is ending penny production, which may change the landscape of cash transactions. According to the Wall Street Journal, the U.S. Treasury is preparing to halt the minting of new one-cent coins by early next year. This decision follows the production costs surpassing their face value, as it costs roughly 3.69 cents to create one penny.

Price Rounding and Cash Transactions

With the end of the penny, businesses will have to adopt rounding practices for prices. For example, a $19.82 purchase might round down to $19.80, while a $19.83 purchase rounds up to $19.85. Interestingly, transactions made by check or card will not be affected by these rounding rules.

Legislative Movements and Public Sentiment

Recently, a bipartisan bill was introduced in Congress to cease penny production, citing a significant cost-saving potential for taxpayers. As the trend unfolds, many fear that without pennies, cash transactions will become inconvenient for some users.

International Perspectives

Learning from Canada, which ditched its pennies years ago, gives insight into potential outcomes. Canada saw cash transactions rounded to the nearest nickel, suggesting the U.S. might adopt similar measures as pennies disappear.

Future of Pennies and Collectibles

As speculation arises about the value of leftover pennies, experts believe they won't skyrocket into collectibles. While the penny will remain legal tender, its future as a currency presence looks bleak.

Consequences of Penny Termination

• Loss of precise change in cash transactions
• Impact on those relying solely on cash
• Possible cost to consumers unable to use cards

In their ongoing assessment, Treasury officials note that reducing penny generation could save approximately $100 million yearly.