Ban the $100 bill?

New and more colorful $5 bills, intended to make counterfeiters’ lives more difficult, went into circulation earlier this month, joining the already spruced-up $10s, $20s, and $50s. The old $5 bills will continue to circulate until they wear out.

Coming next, at a date still to be determined, is the new $100 bill—unless, that is, those who would dump it altogether have their way. The anti-$100 bill argument, made in newspapers recently via this article, is that the $100 bill is handy for terrorists, drug kingpins, and other criminals who deal in large amounts of cash but plays little or no role in the lives of ordinary, law-abiding consumers.

Eliminating the $100 bill (the jargon is “demonetizing” it) would presumably mean that those of us with a C note we got from Grandma last birthday would be able to cash it in for some period of time before it became worthless. Criminal types with crates full of them, however, would have a lot of explaining to do.

What do you think? Should we keep the $100 bill or phase it out? Which would be better for consumers?  Please feel free to comment below.

Comments

[Steve Blackwelder]

I agree with the comments saying that eliminating the U.S. $100 and $50 bills would not do much to discourage illegal economic activities, much less reduce them.

I also agree with the comments saying that using cash for purchases is an effective form of personal financial discipline; I'm all for reforming my own personal financial discipline and encouraging others to do so, especially now (Friday, November 14, 2008). Depending on ATMs and using debit and credit cards more than necessary (although plastic does have good uses) is a habit I've practiced for too long. One power outage lasting a few hours, much less a natural disaster, could put me at a serious inconvenience.

I'd like to suggest that Congress and the Bush and Obama administrations take steps to restore confidence in $50 and $100 bills. One way to do that without too much disruption to more urgent work might be to accelerate the removal and replacement of all of those bills' previous designs, even outside U.S. territory as much as possible, through banks and related cash-handling companies, post offices, and the cash drawers in all levels of government offices that handle cash. Furthermore, yet another round of redesign that helps small merchants and their cashiers believe again might be well worth the cost even if it weren't technically necessary.

[Mark]

Wow, some of the comments here are really funny. People who think they should get rid of the $100 bill because they prefer to use debit cards? Who are you to eliminate other people's convenience for your personal preference? Almost everyone I know prefers to use cash. Here in the European Union, we have 100's ($130 roughly), 200's, and 500 euro bills. They are not as commonly used - 50's and 20's are what come out of ATMs here therefore 50's and 20's are the most common. However, they are perfectly normal and no you are not 'suspicious' for having money! What kind of ridiculous argument is that? My goodness, are you people really that brainwashed? Some people refuse to use bank accounts, credit cards, and debit cards.. many people throughout the world (including the US) just prefer good old cash! A $100 bill is probably about 75 euros or so, that is NOTHING, it's such a small bill! In Japan, go to the ATM and withdraw a few hundreds dollars (equivalent). The ATM will only spit out 10,000 yen bills - which are equivalent to $110 (at time of writing). 10,000 yen are extremely common, used in every day grocery shopping, subway ticket purchasing, so on and so forth.
Grow up people, the world doesn't revolve around your crappy credit & debit cards. Nobody cares about what you think!

[Michael Gallagher]

In nswr o JLK's comment, the largest Euro denomination is 500 Euro not. See:

http://www.ecb.europa.eu/euro/banknotes/html/index.en.html#denominations

Then again, maybe criminals really love Europe. :)

[Adam Alvarez]

i use $100 bills all the time (i'm not a criminal of course), but hey if it helps take the drug dealers and terrorists opportunities away, i'm all for banning the $100. only problem there is that i have to carry around more bills. but like i said, it's not a big deal.