Over the last few years Bank of America has been publicizing its keep the change program . Essentially Bank of America rounds of what you pay to the nearest dollar. Thus if you buy a burger for $3.49 , Bank of America will round it to the next logical figure of $4. Bank of America will match the keep the change for the first three months and then match proportions for the same. Interesting program!
What amount do consumers pay tax on ? $3.49 or $4.0. Bank of America might make some
I had heard of a similar thing used in the movie "Office Space" where the IT Geeks rounded off every transaction to the nearest dollar amount and won themselves a fortune.
Whats so great about this? My guess is that this is meant for lazy people who do not transfer from Checking to Savings account immediately and loose the interest OR its good for people who do cash transactions and loose cash all the time.
According to the article about 25 million people do not have bank accounts .
In relation to my earlier post about coins been eliminated - could the above be one way of starting it OR do we not need it once we get rid of those pennies or nickels ?
Sunday, February 17, 2008
Small denominations - should they be eliminated?
CBS 60 minutes last week talked about "Should we make cents". Here are some of the takeaways summarized
1. It takes approximately $134 million in cost to make $80 worth of pennies.
2. Pennies are made up of approximately 98% zinc the cost of which is spiraling over the last few years.
3. Its illegal to use these coins and resell them for the metal.
4. Kids used to collecting pennies or nickels will now have to search for something of greater value to start putting in their piggy bank.
5. Rounding off will cost Americans approximately $600 million a year.
6. Americans waste approximately 2.4 hrs a year counting pennies ! Is it a lot?
Some thoughts on the same:
Most of the things in US have a price tag of .99 , 9.99 or 99.99 are common examples. Will they get rounded off to the next digit ? If these are taxed items the taxes of these could be adjusted to rounded off to the next divisible by dime or 10 value !
This will be a one time inflationary hit that will be felt.
Some people have pointed out the 9/10 value thats commonly seen as gas stations. How do we account for that?
Most of the money is nowadays paid on credit or electronic media. So, that gives a lot of freedom on not producing pennies !
What do we do with our existing pennies or nickels if they are stopped ? Bring it to n exchange center where you get back the equivalent back and the change in electronic form?
OR last but not the least - make paper money for these small denominations?
1. It takes approximately $134 million in cost to make $80 worth of pennies.
2. Pennies are made up of approximately 98% zinc the cost of which is spiraling over the last few years.
3. Its illegal to use these coins and resell them for the metal.
4. Kids used to collecting pennies or nickels will now have to search for something of greater value to start putting in their piggy bank.
5. Rounding off will cost Americans approximately $600 million a year.
6. Americans waste approximately 2.4 hrs a year counting pennies ! Is it a lot?
Some thoughts on the same:
Most of the things in US have a price tag of .99 , 9.99 or 99.99 are common examples. Will they get rounded off to the next digit ? If these are taxed items the taxes of these could be adjusted to rounded off to the next divisible by dime or 10 value !
This will be a one time inflationary hit that will be felt.
Some people have pointed out the 9/10 value thats commonly seen as gas stations. How do we account for that?
Most of the money is nowadays paid on credit or electronic media. So, that gives a lot of freedom on not producing pennies !
What do we do with our existing pennies or nickels if they are stopped ? Bring it to n exchange center where you get back the equivalent back and the change in electronic form?
OR last but not the least - make paper money for these small denominations?
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