Legal tender in the US refers to coins, notes, and bills defined by the Coinage Act of 1965, but businesses are not required to accept them. Checks, credit cards, and electronic payments are now more common for debt settlement. Some businesses have restrictions on the type or amount of currency they accept. Paper money is still popular, but higher denominations are rare.
Legal tender is a term that officially refers to specific payment options that are offered or offered to satisfy a debt that the lender must accept. In the United States, as established by the Coinage Act of 1965 at Section 31 USC 5103, the coins, notes, and bills that make up United States currency are defined as legal tender. The term currency not only includes the more familiar bills with the images of early presidents, but also rarely encountered types of currency, such as Federal Reserve notes and United States notes. Foreign money in the form of a coin or coins is not considered legal tender in the United States. Therefore, the common legally valid forms of tender familiar to most US citizens include bills and coins.
Although a national law determines the specific definition of legal tender, there is no federal law that expressly requires a business, organization, or lender to accept any type of commonly found legal tender. Organizations that only accept currency as payment are much less common today than they were a few decades ago. In fact, most modern debt settlement uses checks, money orders, credit cards, and debit cards instead of legal tender for payment documentation and convenience. Even more recent changes to our payment methods, such as electronic funds transfer (EFT) or paying through companies that started out as large online retailers, are now common means of paying down debt. In fact, US government tax refunds, retirement and disability checks will soon be available only through an EFT deposit.
Other common business restrictions hinder the notion of a legal tender that must be accepted or cannot be rejected. The most common example cited involves buses refusing payment except for coins or retail establishments refusing to accept currency over a certain amount, such as convenience stores refusing to accept currency bills over $20.00 (USD). ). Whether such policies are established for convenience, ease of business, concerns regarding false invoices, or security concerns, courts have repeatedly upheld them when challenged.
Although the use of the currency is declining, paper money still has an appeal that lacks the digits on a computer screen or a credit card payment statement. Commonly found paper money includes $1.00, $5.00, $10.00, and $20.00 (USD) bills. $50.00 (USD) is rarely found but fondly remembered. The highest denomination of currency remaining in circulation is the $100.00 (USD) bill. Higher denomination notes are held by collectors or are withdrawn and destroyed when returned to the Treasury system.
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