Eleven days ago the Planet Money podcast, hosted by National Public Radio, ran a story about rewards enthusiasts buying $1 coins from the U.S. Mint on their credit card in order to collect frequent flier miles.
Within a day, the story was a top trending topic on Alexa.com. The following day, I wrote a post explaining the U.S. Mint loophole on this blog. My story ran as a guest post on MSN Money, where it was shared 2,377 times and sparked nearly 100 comments.
Exactly one week later, the U.S. Mint acted: it announced it is ending credit card payments for it’s $1 coin program. Here’s a statement the U.S. Mint posted on its website on Friday:
The Mint has determined that this policy change is prudent due to ongoing activity by individuals purchasing $1 coins with credit cards, accumulating frequent flyer miles, and then returning coins to local banks. Local banks, in turn, returned coins to the Federal Reserve. While not illegal, this activity was a clear abuse and misuse of the program.
Don’t get me wrong: This isn’t the first time the U.S. Mint’s $1 coin program made headlines. The Wall Street Journal ran a story in December 2009 titled Miles for Nothing, featuring interviews with several people who used the program to purchase $10,000 or more. The Los Angeles Times picked up the story a few days later.
But did its recent resurgence in the news — coming on the heels of an entire Planet Money series about the U.S.’s efforts to promote the $1 coin (which they titled, fittingly, $1 Billion That Nobody Wants) — hasten the closing of the program?
I say yes, and I believe Planet Money takes the credit (or blame, depending on your point of view). The day after the Planet Money story ran, California Democratic Congresswoman Jackie Speier sent a letter to her fellow Capitol Hill lawmakers, announcing her intention to push a law through Congress that would halt the making of these coins.
“My bill directs the Secretary of the Treasury to stop minting the $1 coins, immediately halting production of these unnecessary coins,” Speier wrote. “Taxpayer dollars that will be saved from this legislation will go towards the deficit.”
Perhaps journalism can still change the world.
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If your aim is to change the world, journalism is a more immediate short-term weapon.
TOM STOPPARD, London Guardian, Mar. 18, 1988
Whenever people are well-informed they can be trusted with their own government.
THOMAS JEFFERSON
Read the original post: How to Fly First-Class Around the World For Free
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Speaking of MSN Money …
Donna Freedman, a writer for MSN Money’s Smart Spending blog, is my friendly “challenger” for the championship round of voting in the “Parisian Champs-Élysées” of Personal Finance, an annual blog competition. My post about what I’d do with a million dollars is squaring off against her post about the Great Depression. Please visit the site and cast your vote — the polls close on Thursday. (To vote for me, just go to this link and write the word “DEBT” in the comments.)
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Congratulations …
To CityFlips, the winner of the book Moneylicious by Ornella Grosz! Thanks to everyone who participated in our giveaway!
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I’d Like to Thank the Academy …
Thanks to the Carnival of Wealth for featuring my original post about the U.S. Mint loophole.
You would never be able to get away with this in Canada where I live. The only way you can take out money at the bank is with a debit card which is directly linked to your checking account. No credit cards allowed.
@Miss T – And I hear in Canada, everyone already uses the $1 coin! It would be great if we could start using it too … we would save a “mint” (haha, pun intended) on printing costs.
I read about this report here and am not surprised that the program is closing. I am concerned that the Congresswoman has no economic sense and should instead be calling for the ceasing of printing of $1 bills and go with $1 coins instead like Canada.
@cashflowmantra – Yeah, it’s too bad that its so unlikely we’ll ever start using the $1 coin — we could save a lot. Hopefully we’ll get rid of the penny, which (literally) costs more to make than it’s worth.
What a shame in my opinion, and honestly when I saw you follow the trend of posting about it I feared that this would be the result. I had no intention of using the loophole myself, however it was the one way in which the general public could stick it to the credit card companies. As if they suffered from that. And the best part was that it wasn’t screwing anyone else over!
@Charlotte — I’m surprised nothing happened in 2009, after the Wall Street Journal and the L.A. Times covered the U.S. Mint loophole. Surely those two news groups are (probably?) more influential than a podcast by NPR? So I can’t really explain why the Mint chose to close the program now, rather than back then, other than to hypothesize that maybe the budgetary pressures from the recession/debt played a role in their decision?
Wow, this is a great example of showing how fast information travels online… BTW, I voted for you.
Hope you win… but it looks like a lot of votes for Grandparents…. 
@WorldofFinance – Thanks for voting for me!! I’m thrilled just to make it to the championship round. And I love the post about the Grandparents that I’m competing against — it’s a really good post.
Maybe I’m a sucker, but I do still think journalism can change the world. Which is why it’s so important for journalists to be responsible in their reporting. (Ahem…FOX News…)
@Melissa — I think journalism can change the world, too … lots of journalists are feeling pessimistic right now because of how many newspapers are shutting down and local (town) television news stations are enduring huge cuts. This is a good reminder that what they do still makes a huge difference!
Wow. I totally missed all this. Not sure where I was! Probably under a rock. I say I’d like to see the $1 coin be used more, but I don’t use it myself. I probably shouldn’t act like I have an opinion if i don’t act on it.
thanks for killing a good thing you big dumb loudmouth
@ach – I thought about deleting your comment since it’s so rude, but I decided to approve it so the world could see what you have to say.
I’d like to respond that I’m flattered at how powerful you believe I am. The Wall Street Journal, L.A. Times and NPR coverage combined couldn’t influence U.S. Mint policy — but the Afford Anything coverage sure made the Feds sit up and take notice!! That’s right, baby! **Flexing muscle**
Wow @ach sounds like a delightful chap.
Yes I believe that journalism (and by that I mean good quality journalism minus Mr Murdoch’s meddling ways and minus the use of phone hacking) has the capacity for considerable change. I’m so glad that MSN Money picked up on your post! Off to vote now…
I say I’d like to see the $1 coin be used more, but I don’t use it myself. As if they suffered from that. I am concerned that the Congresswoman has no economic sense and should instead be calling for the ceasing of printing of $1 bills and go with $1 coins instead like Canada. I totally missed all this.
I totally missed all this. I’m so glad that MSN Money picked up on your post! Wow.