Money & Career

Goodbye penny! Five things to know about the penny phase out

With the demise of the copper coin, many people are unsure of how this will affect their financial transactions. Here are a few tips to consider.

Today the Royal Canadian Mint stops making pennies. This will change the way Canadians make cash transactions; in some instances, we’ll have to replace the lucky penny with a nickel or a dime. While penny-pinching will never be the same, many of us will be glad to see those little copper nuisances gone for good from our wallets, pockets and junk drawers. Whether you’re celebrating or mourning the demise of the penny, here are a few things to keep in mind:

1. You can still use pennies

The Royal Canadian Mint isn’t going to make them anymore, but pennies are still legal tender in Canada and you’ll still be able to find goods and services priced in one-cent increments.

2. Get used to rounding

Businesses that decide to stop accepting pennies will round your transactions up or down – so, if your total is $1.01 or $1.02, you might pay $1.00. If your total is $1.03 or $1.04 it could be rounded up to $1.05. The catch: whether they round up or down is 100 percent up to the business so you could end up paying more.

3. Everything stays the same if you don’t pay cash

If you pay by debit, credit or cheque, prices will stay the same. So, if your bill is $1.52 you’ll pay $1.52.

4. You can still take your pennies to the bank

Because they’re legal tender, your bank will take them indefinitely.

5. You can donate them to charity

With the elimination of the penny, charities like Habitat for Humanity are now conducting penny drives. You’ll be able to get rid of those old copper coins while doing some good!

 

Money expert Caroline Cakebread has been writing for Chatelaine.com since 2006. She is a recovering academic and the mother of two small kids. She lives in Toronto where she writes and reads about all things financial. Follow Caroline at Twitter.com/ccakebread.