Is Cash No Longer Legal Tender?

An anonymous reader asks: "I attend the University of Illinois at Chicago. Last semester my housing arrangements went smoothly. I put down my application fee, and my deposit just fine, got a room for the semester and life went on. This semester, because there was supposedly a large number of students who did not check into their rooms last semester, we were required to make a $100 prepayment, in addition to the application fee and deposit. No problem, I think, I see the university is trying to make a quick buck off people who don't follow through with their plans. Now I do NOT have a checking account, a credit card, or anything. I don't trust the banks, or the credit card companies, so I am one of the few people who do EVERYTHING in cash. However, they refused to take the cash. Is it legal for a state-owned university, let alone any business to not take legal tender?"

The housing department also will not charge my university account (so I can pay the bursar or whoever I need to) in cash, and they want a check or money order. Nowhere in their letter did they say that. I fear out of technicality I am going to loose my housing since I cannot get them their money on time because they do not take cash.

What can I do?"

Wow...

[ResQuad]

Goto your postoffice, and get a cashiers check. Seriously. Not rocket science here.

Well good luck with that

[Anonymous Coward]

Petty point-scoring over the university aside, sooner or later you're going to have to

• get a grown-up job that doesn't pay in cash
• get a loan
• get a mortgage

You will need bank accounts down the line (and a credit score!) so why not get one now? Even if you leave it empty and top if up for special occasions like this.

It's Your Choice

[TheWanderingHermit]

If you lose the room, it's your choice. I have a small business that makes good money helping people that are sued by credit card companies, so I know how nasty they can be, but on the other hand, if you watch what you're doing, you can keep your funds reasonably safe, at least, safer than what would happen if your cash were stolen. I've worked for businesses that refused to accept cash. One was when I was managing rental property. If they accepted cash, they would have had thousands of dollars in the office for the first few days each month and I would have had to take that cash to the bank, one block away, each day. I asked the same question you did and have had them (and a few other companies) explain that as long as they state the policy and apply it evenly to all, it's legal.

These days credit is more and more important. If you don't have it, many places won't give you a chance to get it because you have no credit record. While I'd like to say I admire you for sticking to your beliefs, you're going to have to make a choice: you can stick by your position and lose your room or you can work out a compromise. If you elect to stay firmly in your position, I seriously doubt the University will be upset. It's a bit what Prosser said to Arthur Dent: "Do you have any idea how much damage that bulldozer would suffer if it were to run over you? None at all." They have nothing to lose here and you have everything to lose.

Overall, not building up credit, learning to deal with banks and credit card companies, and staying on an all cash basis is unwise in this culture. If I stuck to that policy, my net worth would be much lower because I would not have had a credit rating that allowed me to borrow when I needed it so I could build up my business.

While it's just my opinion, I can only wonder if a large part of your reluctance is more fear and unwillingness to understand how to use "the system" to your benefit and that you cover for this fear by claiming it is an ethical issue.

world's smallest violin....

[Anonymous Coward]

Dude, get over yourself, open a bank account. Where do you keep your money? Do you even have any significant amount of money? How do you beat inflation? How do you pay taxes?

What is it exactly you don't trust about banks? I mean, money is a number, and if it goes up in one place it has to go down someplace else, just check your bank statement each month, what exactly is going to happen?

As for your dilemma, have your mommy write the check, or buy a fucking money order. They don't have to accept cash.

Jesus Christ

[suv4x4]

Jesus, you're stubborn:

I don't trust the banks, or the credit card companies, so I am one of the few people who do EVERYTHING in cash. [..] I fear out of technicality I am going to loose my housing since I cannot get them their money on time because they do not take cash.

Do you know few of the things you CAN do with cash?

Get a cashiers check.

Open a checking account.

Just go and do it, don't just put your entire savings in there if you're so paranoid, put the amount that the university will charge you.

Do you honestly are telling us that you'd rather *lose* your housing than open a checking account and put $100 in it?

here's what you do:

[Daltorak]

You get over it. That's what you do. If you're too chickenshit to even open up a chequing or credit account that you wouldn't even use save for the occasional transaction that must be done using a verifiable electronic method, you are not going to make it very far in this world. You won't ever be able to get a place you can call your own; you will have difficulties getting some kinds of jobs if you don't have a demonstrable credit history; you won't be able to get a variety of services. Sure, you can go to the local Western Union and constantly have to make money orders for everything, but then you'd constantly have to carry hundreds if not thousands of dollars around with you (how safe is that?) and you have to pay out of your own pocket every time. Plus, to most people, you won't look like you've got your shit together if you're constantly paying for everything with money orders. People that you want most to trust you, won't.

And how the heck do you plan on saving money? Put it in a shoebox under your bed? What if your place burns down in a fire, or what if someone breaks in and steals it? Insurance companies won't replace lost or stolen cash. If your credit card or bank card gets stolen and used for fraud, you almost certainly will get your money back -- that's the beauty of little electronic footprints and camera footage.

Two Points

[Shihar]

First, the answer has already been posted. Get a money order.

Two, you are an idiot if you pay cash to the university. You don't trust banks but you are willing to trust a university? Your trust issues are more then a little fucked up. If you pay cash to a university, you have one less piece of a paper trail should the university turn around and screw you... and screw you they often do. Universities are notorious for piss poor management, lost bills, and all other manner of headaches. Despite the general incompetence of most universities, the one thing you can always fall back on is that if they charge you electronically there is not only their receipt, but a transaction from your bank as well. When you go to dispute your bill, you will be armed with a very clear record of how they fucked up. Your trust priorities are a little confused if you think that a bank is more likely to screw you then a university.

I highly suggest making friends with money orders, refillable credit cards, or some other method of paying besides cash. Only using cash will keep you from doing some very simple things, like ordering stuff online, sending checks in the mail, etc.

I am not sure if you are paranoid, trying to dodge taxes, or just are not happy with the crop of crazy groups available at universities and decided to start your own but you are likely to find the all cash world not worth whatever you are getting. Sure, you might dodge a few taxes, but the amount you pay in pain and the inability to easily use basic services is likely to be far worse then Uncle Sam's FICA taxes. If you are just paranoid... well, I suggest seeing a doctor with the power to prescribe medication. Uncle Sam really doesn't give a shit that you had to pay a school deposit. Really.

Do you trust the Federal Reserve ?

[Zork the Almighty]

I don't get it. You don't trust banks, but you trust the Federal Reserve ? The people who can and do print money like it grows on trees and in cotton fields ?

Re:Jesus Christ

[clickclickdrone]

Indeed. I'd like to know just what the problem with banks is - do they make a habit of running off with people's money is the US?
Personally I can't remember the last time I touched a bank note - I do everything on credit or debit cards (or online, natch). I have a small pot of change for carparks etc. but that's about it.

Very dumb way to live.

[aussersterne]

You will need credit. Not just to buy and sell. To get an apartment. To get a job. To forge other relationships with various institutions that want to evaluate your trustworthiness with something other than your own claims about yourself.

It's regrettable, maybe (certainly I think so), but it's also damn tough to live any other way in the end. A life without credit is a life with many fewer opportunities and many fewer potential relationships. Not just slightly fewer, but fewer to a crippling extent.

But credit is not something that exists here, now, it is something that exists through your own financial history of using it. That is to say it's circular: you get a little, you use that little, then you get a little more, then you use that little more, etc. You only get Credit (big 'C') by using your credit (small 'c') responsibly over time. The later you start, the later you'll actually get there.

If you're over 20 and you haven't started already, you're way behind the game. By the time you're 30 and haven't started, most institutions won't extend you any anymore. They'll just paint you as "different." They don't care whether you're different in a bad or good way for not having credit; they just don't want to do business with people who are "different." Because "different" people might respond to responsibilities in "different" ways from the ways in which members of society typically do.

My advice: go open a bank account and put some money in it. Leave a balance of a few hundred dollars there for a few months, then get a credit card with that bank. Use the damn card. Pay off your balance. Even if you just do $20 a month, i.e. toilet paper and granola bars, on the card. Just to get a credit history going on.

And later on, if you find yourself in this situation again, you'll have a bank account that you can quickly deposit some cash in and use a Visa/Mastercard debit card against.

Re:It's Your Choice

[Corporate Troll]

You do realise that you can use a credit card as if it were a debit card? I do, works perfectly fine. At the end of the month, I pay what I owe them and it's all done. Just don't use credit cards for loans, as you say yourself. Us it as a convenience.

Re:Very good question.

[dtmos]

...but the policy would apply to all housing students. I don't know how many students are housed at UIC, but if 10,000 students paid cash in the last few days before the deadline (a not unrealistic situation at a large state university which may have 20,000 housed students), the housing authority could be holding $1 million in cash, in small bills. The security required for this, both physical (i.e., safes, cameras, limited access to certain areas) and financial (receipts, auditing, etc.) would be a major pain. (I know that if I were managing that department, establishing a no-cash policy would be my first act.) There are often valid legal (liability -- after all, this is the U.S. -- corporate structure, etc.) and accounting reasons for separating university housing (or even specific fees) from the university bursar, so the fact that he can't just have the bursar -- who may be able to accept cash -- debit his account isn't surprising, either.

One of the main functions of college is to prepare young people for the Real World(tm) -- a place where you will often face people and entities that are not the slightest bit interested in what you want. Considering the needs of others, and not just your own desires, has a name: Maturity.

Re:Jesus Christ

[Ponzicar]

Not that I've heard of. Plus we have this: http://en.wikipedia.org/wiki/Fdic [wikipedia.org] so bank failures aren't a big worry. I guess he could be worried about banks allowing fraud or hidden fees that they use to squeeze extra pennies out of people, but that can be minimized by only putting small amounts into the bank and using the account only when necessary.

Re:It's Your Choice

[GoofyBoy]

What a strange argument to apply here. You've already on record for attending university. You are already on record for living in a dormroom. You've even posted this on the Internet. Do you think they need to track small unmarked bills or credit card records or satelite photos to get this information?

Re:It's Your Choice

[Red Flayer]

As for borrowing: get a loan from a bank. Borrowing on a credit card is madness, interest-wise.

Not so, most credit card companies will not charge any interest on balances paid in full by their due date. Not paying your bill in full so that you are charged interest -- that's madness. Using a credit card as a short-term 0% loan -- that's free cash.

Say you have $1500 worth of purchases every month that can be made via credit card. If you pay the credit cards off in full every month, you have the use of an extra $1500 at no cost until you need to pay your statement. You can make money off that $1500 if you want, say by purchasing a CD.

Not borrowing, when you can easily get a return significantly higher than the interest you need to pay, is madness.

Staying off the record if you like.

[Valdrax]

The "grown up job that doesn't pay cash" is really the only big problem, but even then you can go to a check cashing place and pay an exorbitant rate to get your cash. I mean, you don't *have* to do direct deposit. Manage your expenses wisely, and you'll never need a loan or a mortgage.

If you need a credit card equivalent, try PrivaCash. I heard about it on a privacy website. It's basically a pre-paid debit card that isn't tied to your name. You can pick up preloaded cards in stores, but if you want to reload them, you have to deal with the bank that backs them. You can't do things like rent cars or do other things where access to a debt source is used in the place of a deposit, but you can make purchases online.

Really, though, unless you are planning on living completely off the record as much as possible once your stint in a university is done, go for a credit union. It's like a bank, only not evil (or at worst significantly less evil). Avoiding a bank is very, very hard in modern life. For more details about what you lose in terms of privacy and how to protect yourself to a limited extent, check out the book "How to be Invisible" by C.C. Luna.

Re:Jesus Christ

[thesandtiger]

On top of that, the question itself is fucking stupid.

"Dear Slashdot - I'm having trouble opening a jar of pickles. WHAT DO I DO?!"

"Dear Slashdot - my mom won't let me have boys over unless we stay in the living room. Any advice?"

I mean, the guy is in college and rather than solve a trivial problem on his own, he needs to ask the fucking Internet?!

Here's my helpful suggestion to the person asking the original question: Just give up. Seriously. If you can't figure out how to do something simple like this on your own, the rest of life is going to steamroll you.

Re:It's Your Choice

[Bourbon Man]

In addition, you can actually profit from the credit card company. Cash-back, airline miles, and other incentives are actually profit, as long as you pay your entire balance each month, and the card has no annual fees.

You can also lose money by not having good credit. Many insurance companies use your credit score to adjust how high a premium you must pay. If you eventually need a loan and are able to get one, your interest will be substantially higher if you have bad or no credit. Certain jobs require a good credit rating to ensure you are financially responsible; if you are not financially responsible, you are considered to be more of a theft/embezzling/bribery/security risk.

Everyone has a credit rating, whether they want it or not. It's a tool that may be used to your advantage if used properly. Ignoring it cannot benefit you, only harm you in the long run.

Re:In some cases....

[milamber3]

The link you posted states that private companies may choose not to accept some forms of legal tender. I suspect it specifically mentions private business because publicly funded institutions, such as the school in question, are required to accept ALL forms of legal tender.

Re:It's Your Choice

[argStyopa]

"Borrowing on a credit card is madness, interest-wise."

Not really.
There are many no-annual-fee cards out there that charge no interest if you pay it off every month.

So in fact, you MAKE MONEY using a credit card for regular purchases, because your money is sitting in the bank gaining interest through the whole month.

And 'debt' is only an issue if you spend more than you have currently.

Secondly, if you have a pocketful of cash you are mugging bait, and if you are robbed you lose.
If you have a credit card you
a) have as much cash as you need when you need it.
b) if you're robbed, as long as you conscientiously inform the card company, you are not liable for anything charged on it - you're out nothing.
c) if you travel, you get the best possible exchange rate, and don't have to be concerned about carrying the 'right' currency.

No, you should be able to use cash for anything you purchase, but IMO using cash instead of a credit card is rather dumb.

Not so hard in Chicago

[GodInHell]

There are money order and check cashing places on every other corner around UIC. Just take your cash to them, pay your 5% ludite fee, and pay the damn bill.
 
-GiH

Re:Staying off the record if you like.

[bilbravo]

Maybe I am naive, but how is being good with your finances going to get you out of a mortgage? Car loans, other loans, yes. Mortgage? I'm not sure how you get there. Unless you are born with a silver spoon in your mouth or someone gives you a house, you're going to need a loan to buy one. Unless you're going to save up and rent some place in the meantime, but my guess is renting something for the amount of time it's gonna take you to save $X thousand dollars is NOT BEING GOOD WITH FINANCES. Leasing is silly if your end goal is to own.

Re:It's Your Choice

[UbuntuDupe]

No, there isn't. Read the reply:

"Branch managers aren't allowed to make judgment calls anymore." i.e., They're not going to call in the cavalry for one small mortgage.

I did do what Ramsey described (though it wasn't called that). My "financial situation" is pretty simple: stable employment, no other debt, lots in mutual funds, no other obligations, no judgments, no liens, no bankruptcy, loan for about 2x yearly gross. I explained this to their "special situations expert". The result:

The very best they would consider giving me is 80% financing on a 3/1 ARM at 10% interest. I was classified as subprime.

My situation isn't "special". I don't have unstable, commission-based income. I don't have past debt. I don't have complicated, illiquid holdings. I don't have bizarre partnerships.

Do you see something wrong with that picture?

Re:Wow...

[mrchaotica]

(and they aren't going to chase anybody up for a lousy quid fifty; it'll cost them more than that in ink just printing the address on the envelope)

You forget that this is a public university. Not only are they petty enough to demand the buck fifty, but they'll put holds on his registration to do it! They don't have to go after him; he'll come crawling back when he can't register for classes.

Re:Wow...

[alanshot]

"...and they aren't going to chase anybody up for a lousy quid fifty..."

Dont count on it. Here in the 'States, there have been many instances of government agencies and the like actually chasing people down for sub-$1 amounts owed.

I remember reading a story about a woman that was actually arrested for an outstanding underpayment of 32 cents. Apparently they spent 6 months to a year mailing her notices about it. As I remeber she went to a court hearing for something else (as a defendant or witness)when they by chance discovered she had an outstanding warrant and arrested her on the spot.

Never underestimate the stupidity of government.

Besides, if he tried to pull the "you are responsible for the charges, here is my money order for $98.50" they would most likely hand it right back and say sorry, thats not the correct amount. bring us one in the proper amount.

Personally, I say adapt and accept the requirements of living in the real world here in the 21st century and get a freaking checking account. If you want to be paranoid and noconformist, go live in a shack in the mountains or move to a 3rd world country where they barter and dont use banks. (or at least dont try to do things like going to college that might require things like a bank account, credit accounts, etc)

Re:It's Your Choice

[smellsofbikes]

I had the same experience: no credit history whatsoever, even though I owned a house outright and had another house-worth of money in stock. I managed to get a mortgage, but only because they A: called all the companies I paid bills to (utility, phone, car insurance) to check my payment history, and B: because I could buy the house outright if I wanted to, so they knew I was financially solvent. If either of those had come up short, no house for me.

Having a credit history isn't a bad idea, unfortunately. My brother has a credit card that gives him money back, somehow, and he uses it for utilities/phone, pays it back at the end of each month, has a great credit rating, and gets like a 4% discount, effectively, on all his bills.

Re:I work at the IRS

[Anonymous Coward]

It's a pointless exercise. The guy doing the counting doesn't make nor can he change policy. None of the people working in the office can change the policies either. The IRS doesn't give a rat's behind if you pay in pennies or hundred dollar bills because you're paid your taxes, they've got their money.

Re:Renting isn't always a bad financial choice.

[Damvan]

My mortgage is about half what I'd pay in rent for an apartment in my area.

Buying/owning a home isn't any more of a rat race than buying a car. Buying more home than you can afford is. Most people buy way more than they can afford.

Re:In some cases....

[milkman_matt]

"The fact is that at times, you are going to have to play by other people's rules. This is why I would say this guy should just buck up and get a bank account of some sort."

Well, there's also money orders....

Re:In some cases....

[Planesdragon]

Shouldn't it be just as unreasonable for them to expect me to pay for $240 worth of food for a whole busload of people in $20 bills or smaller?

They can always waive a posted rule -- they cannot always impose it if it isn't posted.

Re:I work at the IRS

[Sharth]

Probably because it's illegal for him to post that information? Privacy requirements and such.

Re:I work at the IRS

[gonzo67]

Actually, the argument used by Wesley Snipes (and others recently convicted) is that they do not have income.

Schiff is the leader of this group...(http://www.quatloos.com/taxscams/cm-taxpr .htm). One of the arguments they use is that wages are exchanges of property rather than taxable income.

Obviously, it fails to actually win in court but that is the argument.

And, the wealthy can avoid income taxes. If your source of money is from dividends, you don't pay income tax on them, you pay capital gains taxes (which is a lower rate!).