Update on My Gold Coin Purchases

Early last year I suggested that we all could make money by buying US $1 gold dollar coins. In part of that strategy it said to "deposit the money at your bank (or use it yourself)" once you had the coins. I had a reader recently leave this comment on that post:

I heard today that the US Mint has now stated that credit card purchases will be recorded as cash advances rather than credit card purchases. They said credit cards typically do not give reward points for cash advances. I think this is to stop people from earning points or miles on the coin purchases.

The commenter then linked to this article that noted the US Mint had changed its policy because people were loading up on the coins (one buying $800,000 worth -- yikes!), simply returning them to a local bank, and pocketing the rewards.

I'm not sure how this was done since the limit for the free shipping program was two boxes ($500) per president, but I'll let it go since the Wall Street Journal reported that the $800k is true.

On a later, related post titled Free Money Finance Makes Gold Dollar Coins a Success, a different reader recently left this comment:

The intended purpose of the Circulating $1 Coin Direct Ship Program is to make $1 Coins readily available to the public, at no additional cost, so they can be easily introduced into circulation–particularly by using them for retail transactions, vending, and mass transit. Increased circulation of $1 Coins saves the Nation money.

The immediate bank deposit of $1 Coins ordered through this Program does not result in their introduction into circulation and, therefore, does not comply with the intended purpose of the Program.

I've covered before what I've done with the coins (see A Creative Use for Dollar Coins, Blessing Boxes Keep on Blessing, and Giving Blessing Boxes), but I wanted to give you all an update on where we stand with them.

As a recap, I bought somewhere in the neighborhood of $2,500 in gold coins (the max two per president that qualified for free shipping), earning somewhere in the neighborhood of $45 for my effort. Since then, we've given the coins away in the manners described above, but have also given them:

• To people we know in need (friends, church acquaintances, etc.) -- this is basically what the "blessing box" idea is
• As birthday presents
• As Christmas gifts
• As payment for a local (charitable) paper we receive
• As spending money (I keep them in the coin box of my car)

In other words, I have been circulating them (I didn't take them to the bank.) People LOVE getting the coins since they are still relatively rare, so we keep our stash on hand and give them out here and there as a need arises. We have about $1,000 or so of them left, and once those are gone, I'll likely buy more for the same sort of uses.

Just wanted to update you all and clarify the record -- in case anyone thought I wasn't following the rules. ;-)

How about you? Anyone out there buying/using gold $1 dollar coins?

Comments

[my2fish.wordpress.com]

I bought just (1) pack, so $250, several months ago. I use them for my (2) boys to give as an offering on Sunday mornings at church Sunday school, as well as just loose change to carry with me - vending machines, etc. I like them a lot, and would love to see the $1 bill phased out. I had bought the Washington ones, though, which are (sort of) similar to a quarter when you aren't looking too closely, so for future purchases, I'd probably opt for a different President one.

thad

[Jon]

Any time I use the ATM at work I immediately go to the change machine and change the bills into $1 coins. I despise carrying coins around so whatever is left over at the end of the day goes straight into my change jar. A weird way to save a little money, but it works for me.

[Alan]

According to the WSJ article, "The Mint has added a warning to its Web site that credit-card companies could consider the purchases cash-equivalent transactions not eligible for miles, and Mint officials plan to contact credit-card issuers to try to implement a solution".

So it doesn't sound like they've made any changes yet, but they might. If you want to order some coins for their intended use it might be better to do it now before they categorize all of these transactions as cash advances.

[Jim]

Cash advance transactions also often have fees associated with them like 1-4% range. That would really make it bad choice to use a credit card to buy $500 coins if you have to pay 1-4% fee.

[Life Compass]

FMF, I love your Blessing Boxes idea! I have often felt led to thank and bless people who have "thankless" jobs. I travel in airports a bit at times, and I like to give a gold coin to the people who clean the bathrooms there, and to the members of the armed forces who are traveling.

[Harm]

Let's be perfectly clear....the coins may be 'golden' in
color, but there is no gold in them.....right?

[Old Limey]

@Harm
Wikipedia:- The Sacagawea and Presidential dollars are usually referred to as golden, despite not containing any gold, as they are of a golden color.

[Kathy F]

I just got %500 worth of the one dollar coins which were charged to my AmEx card on Jan 14, 2010 and it does not appear as a cash advance. I probably won't buy any more for a long time.

[Gary]

These are extremely awkward to use. I converted $250.00 which fits easily in my pocket as bills, but as these coins they are about 10 lbs. They may be green (last 20 years compared to bills lasting 2 to 3 years, therefore they are made less often), but not very user friendly

[Ace of Wealth]

I read about people buying up coins with a credit card to rack up miles or other rewards. I think it's wild that some people got away with purchasing so much! I really hope that these coins continue to circulate and eventually replace the dollar.

[Billy]

I've purchased several thousand dollars worth of these coins over the last couple of years, and honestly most of those have been deposited back into the bank. I just don't spend that much cash, so my opportunities to put these in circulation is limited. However, I am greatly enjoying all the credit card cash back!

FMF - You are correct that the limit is 2 boxes for each president, however you can order up to 20 boxes of the Native American dollar coins ($5,000). This much is a bit impractical if you are going to spend them, but if all you care about is the credit card points it is the way to go.