Home > Managing Debt > Can You Pay Back a Debt in Pennies?

Comments 2 Comments
Advertiser Disclosure


Imagine $2,064 in “nice rolls of quarters nickels and gold dollars” and then imagine trying to use that money to pay a bill. One of our readers tried to do just that. Whether he was ticked off about having to pay that debt (he did say he videotaped his attempt), or whether that was simply the cash he had on hand, he says his payment was refused.

His question to us: Can they really turn down legal tender for the payment of a bill?

The answer is normally yes. You’ve no doubt seen signs at gas stations or convenience stores saying bills larger than $20 are not accepted. It’s much the same thing. In fact, banks have been known not to accept payment in coins (or to redirect the would-be payer to a branch with a large-enough safe to accommodate the payment).

Banks have to verify and count the coins, says Nessa Feddis, senior vice president of the American Bankers Association, and it costs them money to do so. “People think that if banks have machines that count the money, then it should be free, but the machines cost money,” she said. And you have to wonder about the motivation to pay in a manner that requires a wheelbarrow.

Furthermore, there is no law that entitles people to use coins to pay their bills.

The part of law that applies to accepting money is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled “Legal tender.” It says, “United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues.”

“This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor,” according to the U.S. Treasury website. But there is no federal requirement that a private business, a person or an organization must accept currency or coins as payment. Private businesses can develop their own policies unless there is a state law that says otherwise. “For example, a bus line may prohibit payment of fares in pennies or dollar bills,” the website says.

As cumbersome as it may be to accept payment that comes in coins, sometimes businesses do so. (If you’re going this route, it’s best to have the coins neatly rolled and to get the business’s permission.) If your payment is rejected by a creditor because it’s being made in coins, keep in mind that you may want to consider using another payment method to avoid a potential late fee and a late payment recorded on your credit report. You can check your credit scores for free on Credit.com to see if late payments are affecting your credit.

More on Managing Debt:

Image: Wavebreak Media Ltd.

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team