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What Should We Do with the Penny?

FinanceLegacy

Our neighbor to the north, Canada, appears to be trying to decide what to do with their penny. For now, the Senate Finance Committee, along with the Canadian Finance Minister, Jim Flaherty, are on the side of getting rid of the penny. This is an issue that is occasionally considered in the United States as well. However, the fact that Canada seems this close to getting rid of the penny has me thinking about whether or not we should be considering it. Two of the main reasons that Canadians are annoyed with the penny include:


  1. It costs more to make than it is worth.
  2. The use of credit cards and debit cards has practically rendered the penny obsolete.
You probably feel the same way sometimes. I know I do when I think about carrying all those pennies around. Rolling them after you have saved them is rough and time-consuming. And, of course, what's the point if you are just swiping plastic? Plus, with the issues facing this country right now, do we really want to keep such a low denomination currency in circulation that costs more to make than it is worth? It's worth thinking about.



Canada has yet to make a decision, but if the penny is abolished in the north, our neighbors will be in company with Australia, New Zealand, and Sweden, all of whom seem to be doing just fine without the lowest denomination coins. (New Zealand even got rid of the nickel.)



What do you think? Should we follow the example of Australia, New Zealand, and Sweden, and get rid of the one-cent coin?


Profile: Miranda Marquit

Miranda is a financial journalist. Her work has appeared in a number of publications, online and off, and been mentioned by the Wall Street Journal, USA Today, NPR, and Consumerist. Miranda is a contributor to U.S. News & World Report, and writes at the blog Planting Money Seeds. She is also a panelist for the Money Mastermind Show, and the Money Tree Investing Podcast.