Pros & cons of a $500 bill, $1000 bill, $5000 bill or even a $10,000 bill?

[james.hendrickson]

James, that would be a good problem to have (lol).

Ha ha, yes. Although cash is a problem in that it doesn't pay interest if you have dollar bills sitting around your house.

[ua_guy]

I'm reminded of an anecdotal story from childhood. Starting around 5th grade I got really interested in mountain biking. I wanted a mountain bike. Dad told me to buy one, then. Had I expressed interest in football or a team sport at school, there would have been blank checks. But, a mountain bike? You're on your own, kid. So I mowed the neighbors lawns, washed their cars, saved birthday money, and helped mom with a garage sale where I sold my old bike. After a year of hard work and saving money, I had a bag full of cash. I was going to buy the bike I wanted that day.

As in, I thought *I* was going to buy the bike. 10-year-old me was going to walk that bag of cash and change into the bank, exchange it for a proper $500 bill, a $100 bill, a $50 bill, and some small bills to cover the $600+ price tag of my dream bike, plus tax. And then I was going to walk to the bike store, give Scott (the owner) the cash for the bike I wanted, and then ride off into the sunset. Putting that $500 bill down on the counter was going to feel awesome, and I was going to show just how serious I was.

Dad had a different idea - we'd just drive to the store, he'd pay for the bike on his credit card to get the airline miles, and I'd give the bag of cash to him and mom to deposit. I was so disappointed...lol. I mean, symbolically, I bought the bike, I saved the money, it was all good. But I was really going to bring the thunder with that $500 bill. This was sometime around 1994...I think $500 bills might have still existed? I've still never seen one.

[LivingAlmostLarge]

I'm reminded of an anecdotal story from childhood. Starting around 5th grade I got really interested in mountain biking. I wanted a mountain bike. Dad told me to buy one, then. Had I expressed interest in football or a team sport at school, there would have been blank checks. But, a mountain bike? You're on your own, kid. So I mowed the neighbors lawns, washed their cars, saved birthday money, and helped mom with a garage sale where I sold my old bike. After a year of hard work and saving money, I had a bag full of cash. I was going to buy the bike I wanted that day.

As in, I thought *I* was going to buy the bike. 10-year-old me was going to walk that bag of cash and change into the bank, exchange it for a proper $500 bill, a $100 bill, a $50 bill, and some small bills to cover the $600+ price tag of my dream bike, plus tax. And then I was going to walk to the bike store, give Scott (the owner) the cash for the bike I wanted, and then ride off into the sunset. Putting that $500 bill down on the counter was going to feel awesome, and I was going to show just how serious I was.

Dad had a different idea - we'd just drive to the store, he'd pay for the bike on his credit card to get the airline miles, and I'd give the bag of cash to him and mom to deposit. I was so disappointed...lol. I mean, symbolically, I bought the bike, I saved the money, it was all good. But I was really going to bring the thunder with that $500 bill. This was sometime around 1994...I think $500 bills might have still existed? I've still never seen one.

this is an awesome story

[Fishindude77]

Things like firearms are typically $500+ purchases, many of which are done with cash. Good place to use $500 or $1000 bills. Would also be good for large person to person purchases; cars, motorcycles, equipment, etc.
Typically can’t write checks at equipment auctions either, have to get pre approved credit or pay cash, another good application.

I’m a fan of cash and cash transactions, don’t like getting bills, don’t use a debit card. The big bills would be cool to have, however I realize I’m in the minority. My kids would take a cross country trip and wouldn’t have ten bucks cash on them.

[Jluke]

I hate getting 50’s or 100’s let alone higher denominations.

even $20’s aren’t convenient at times.

of course I have been cashless for a long time now meaning I only have about $40 at a time and use credit cards, checks or electronic payments for everything I can.

[myrdale]

I'm reminded of an anecdotal story from childhood. Starting around 5th grade I got really interested in mountain biking. I wanted a mountain bike. Dad told me to buy one, then. Had I expressed interest in football or a team sport at school, there would have been blank checks. But, a mountain bike? You're on your own, kid. So I mowed the neighbors lawns, washed their cars, saved birthday money, and helped mom with a garage sale where I sold my old bike. After a year of hard work and saving money, I had a bag full of cash. I was going to buy the bike I wanted that day.

As in, I thought *I* was going to buy the bike. 10-year-old me was going to walk that bag of cash and change into the bank, exchange it for a proper $500 bill, a $100 bill, a $50 bill, and some small bills to cover the $600+ price tag of my dream bike, plus tax. And then I was going to walk to the bike store, give Scott (the owner) the cash for the bike I wanted, and then ride off into the sunset. Putting that $500 bill down on the counter was going to feel awesome, and I was going to show just how serious I was.

Dad had a different idea - we'd just drive to the store, he'd pay for the bike on his credit card to get the airline miles, and I'd give the bag of cash to him and mom to deposit. I was so disappointed...lol. I mean, symbolically, I bought the bike, I saved the money, it was all good. But I was really going to bring the thunder with that $500 bill. This was sometime around 1994...I think $500 bills might have still existed? I've still never seen one.

I'd routinely use my father as an exchange for my savings, handing him a stack of $1's, $5's, $10's, etc for $20's or $100's as the case was.

[QuarterMillionMan]

To piggy-back on Fishindude's post, let's say anyone here sells a used vehicle via private selling (ie, Craigslist, etc). Heck I'll use my own example where I sold a 2009 Dodge Dakota on Craigslist for $3500. The guy paid me in all twenties with some $50 bills and a couple of $100 bills. First of all no way would I take a check. But more importantly as I was counting the cash I was weary that in that stack of cash there could possibly be some counterfeit bills. Luckily none were counterfeit but if the buyer paid with three $1000 bills and a $500 bill it would be so easy to detect a counterfeit having to only inspect 4 big bills as opposed to inspecting numerous $20 bills, some $50 bills, and a couple of $100 bills. Needless to say during that transactions my focus was on inspecting the big $50 bills and $100 bills and to a lesser extent the $20 bills. Who has time to hold each $20 bill in the light looking for the magnetic strip, blue/red fibers in the paper, etc. Or whatever security measures the treasury uses in legal tender notes. Do you get my point?

[QuarterMillionMan]

It would be even more risky if let's say I sold a more expensive used vehicle (ie, $8000, $14,000, etc) and the buyer paid with a lot of $20 bills as in my case example. Preferably I would use Zelle, or Cash App, or even Bitcoin, but not everyone uses these electronic payments.

[kork13]

It would be even more risky if let's say I sold a more expensive used vehicle (ie, $8000, $14,000, etc) and the buyer paid with a lot of $20 bills as in my case example. Preferably I would use Zelle, or Cash App, or even Bitcoin, but not everyone uses these electronic payments.

I will say that I've done this -- we sold DW's car in AK for $14k-ish in a private sale, and he pulled out a thick bank envelope filled with 100s. The electronic payment services only support(-ed) up to a limited (low) dollar amount, so that wasn't feasible either. Crazy, never seen that much cash. It was definitely a pain to handle that much cash all at once, and because I didn't have a local bank account, getting the cash deposited was even harder.

[QuarterMillionMan]

Thanks Kork, why the rest of you want to deal with $20's, $50's, and $100's. Come on man, lol.

[ua_guy]

To piggy-back on Fishindude's post, let's say anyone here sells a used vehicle via private selling (ie, Craigslist, etc). Heck I'll use my own example where I sold a 2009 Dodge Dakota on Craigslist for $3500. The guy paid me in all twenties with some $50 bills and a couple of $100 bills. First of all no way would I take a check. But more importantly as I was counting the cash I was weary that in that stack of cash there could possibly be some counterfeit bills. Luckily none were counterfeit but if the buyer paid with three $1000 bills and a $500 bill it would be so easy to detect a counterfeit having to only inspect 4 big bills as opposed to inspecting numerous $20 bills, some $50 bills, and a couple of $100 bills. Needless to say during that transactions my focus was on inspecting the big $50 bills and $100 bills and to a lesser extent the $20 bills. Who has time to hold each $20 bill in the light looking for the magnetic strip, blue/red fibers in the paper, etc. Or whatever security measures the treasury uses in legal tender notes. Do you get my point?

To that point, smaller bills are easier to spend.

And this is an easily solvable problem. Just meet at the buyer's bank to complete the transaction. I've no problem accepting a cashier's check cut right in front of me. Not only that, banks are usually air-conditioned, and have little tables where you can sit to complete the title transfer and a bill of sale. Buyer and seller are on camera. There's record of the transaction. No cash to worry about. Buyer doesn't have to carry it, seller doesn't have to deal with it.

......but it does make it harder for the buyer to cheat on paying sales tax and registration fees.

[disneysteve]

if the buyer paid with three $1000 bills and a $500 bill it would be so easy to detect a counterfeit having to only inspect 4 big bills

I don't know about that. I see $20s and $100s pretty regularly. I know what they should look and feel like. How often will I see a $500 or a $1,000. If I'm only looking at a few and they all look the same, would I know if they were real?

[QuarterMillionMan]

Cash is king reigns supreme. Let me explain. Banks would love a cashless economy. Why you might ask is because by using a debit card or credit card or Paypal or Apple pay or Google pay or Venmo or Cash App they make 3% or more. Take a $20 bill and you go to your nail salon or barber and pay with a $20. She or he then goes to a fast food joint and gives that $20 for 2 combo meals. That $20 remains $20. But when using a credit card or debit card or other method which reduces the $20 bill by 3% at the nail salon or barber, then the fast food joint reduces it by 3%, etc. The $20 bill after numerous transactions after the fees will be reduced to nothing. Moral of the story whenever possible pay by cash.

[disneysteve]

Cash is king reigns supreme. Let me explain. Banks would love a cashless economy. Why you might ask is because by using a debit card or credit card or Paypal or Apple pay or Google pay or Venmo or Cash App they make 3% or more. Take a $20 bill and you go to your nail salon or barber and pay with a $20. She or he then goes to a fast food joint and gives that $20 for 2 combo meals. That $20 remains $20. But when using a credit card or debit card or other method which reduces the $20 bill by 3% at the nail salon or barber, then the fast food joint reduces it by 3%, etc. The $20 bill after numerous transactions after the fees will be reduced to nothing. Moral of the story whenever possible pay by cash.

I'm not sure why you dredged up a 4-year old post about a different topic to say this, but this is exactly why more and more places are charging a fee for using credit. I find we are spending a lot more cash now because of that. The first quarter, at least, Discover had 5% cash back on restaurants so I was still charging it even if they charged a 3% service fee since I still came out ahead, but otherwise I would pay cash. And I usually try to tip in cash. Anywhere that doesn't charge a fee, though, I use my card as much as possible to get the rewards.

We're aiming to get our lifetime platinum elite status with Marriott this year. We need 50 night credits but we get 1 night credit for every 5K charged to our Marriott card so we use that card primarily. We'll probably charge at least 50K this year. Plus we are planning to remodel the kitchen so hopefully we can also charge the cabinets and countertop and oven/microwave and whatever else we can run through the card assuming there is no added fee.

[myrdale]

Cash is king reigns supreme. Let me explain. Banks would love a cashless economy. Why you might ask is because by using a debit card or credit card or Paypal or Apple pay or Google pay or Venmo or Cash App they make 3% or more. Take a $20 bill and you go to your nail salon or barber and pay with a $20. She or he then goes to a fast food joint and gives that $20 for 2 combo meals. That $20 remains $20. But when using a credit card or debit card or other method which reduces the $20 bill by 3% at the nail salon or barber, then the fast food joint reduces it by 3%, etc. The $20 bill after numerous transactions after the fees will be reduced to nothing. Moral of the story whenever possible pay by cash.

Keep in mind there is a cost to operating with cash.

Daily an employee has to take that cash to the bank and deposit it.

Additionally that cash is a liability in the case of a theft, external or internal. If the store burns down so does the cash.

Under the right circumstances, those 3% fees may be far less than the cost of handling paper money.