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Is Cash No Longer Legal Tender?
An anonymous reader asks: "I attend the University of Illinois at Chicago. Last semester my housing arrangements went smoothly. I put down my application fee, and my deposit just fine, got a room for the semester and life went on. This semester, because there was supposedly a large number of students who did not check into their rooms last semester, we were required to make a $100 prepayment, in addition to the application fee and deposit. No problem, I think, I see the university is trying to make a quick buck off people who don't follow through with their plans. Now I do NOT have a checking account, a credit card, or anything. I don't trust the banks, or the credit card companies, so I am one of the few people who do EVERYTHING in cash. However, they refused to take the cash. Is it legal for a state-owned university, let alone any business to not take legal tender?"
The housing department also will not charge my university account (so I can pay the bursar or whoever I need to) in cash, and they want a check or money order. Nowhere in their letter did they say that. I fear out of technicality I am going to loose my housing since I cannot get them their money on time because they do not take cash.
What can I do?"
What can I do?"
My understanding of the issue, although I do not specialize in this kind of law, is that your cash must be accepted for everything for which the good or service has already been provided; they are not required to accept it when you are making a payment for something you are to receive in the future.
"It is possible to commit no errors and still lose. That is not a weakness. That is life." -Peak Performance
Goto your postoffice, and get a cashiers check. Seriously. Not rocket science here.
snowulf.com
- get a grown-up job that doesn't pay in cash
- get a loan
- get a mortgage
You will need bank accounts down the line (and a credit score!) so why not get one now? Even if you leave it empty and top if up for special occasions like this.Just go get a money order from the post office or even a convenience store.
Doing everything in cash, imo, is sort of retarded. I don't particularly trust banks either, but when inconvenience impacts me regularly, I make concessions.
If you lose the room, it's your choice. I have a small business that makes good money helping people that are sued by credit card companies, so I know how nasty they can be, but on the other hand, if you watch what you're doing, you can keep your funds reasonably safe, at least, safer than what would happen if your cash were stolen. I've worked for businesses that refused to accept cash. One was when I was managing rental property. If they accepted cash, they would have had thousands of dollars in the office for the first few days each month and I would have had to take that cash to the bank, one block away, each day. I asked the same question you did and have had them (and a few other companies) explain that as long as they state the policy and apply it evenly to all, it's legal.
These days credit is more and more important. If you don't have it, many places won't give you a chance to get it because you have no credit record. While I'd like to say I admire you for sticking to your beliefs, you're going to have to make a choice: you can stick by your position and lose your room or you can work out a compromise. If you elect to stay firmly in your position, I seriously doubt the University will be upset. It's a bit what Prosser said to Arthur Dent: "Do you have any idea how much damage that bulldozer would suffer if it were to run over you? None at all." They have nothing to lose here and you have everything to lose.
Overall, not building up credit, learning to deal with banks and credit card companies, and staying on an all cash basis is unwise in this culture. If I stuck to that policy, my net worth would be much lower because I would not have had a credit rating that allowed me to borrow when I needed it so I could build up my business.
While it's just my opinion, I can only wonder if a large part of your reluctance is more fear and unwillingness to understand how to use "the system" to your benefit and that you cover for this fear by claiming it is an ethical issue.
The more you know.
Jesus, you're stubborn:
I don't trust the banks, or the credit card companies, so I am one of the few people who do EVERYTHING in cash. [..] I fear out of technicality I am going to loose my housing since I cannot get them their money on time because they do not take cash.
Do you know few of the things you CAN do with cash?
Get a cashiers check.
Open a checking account.
Just go and do it, don't just put your entire savings in there if you're so paranoid, put the amount that the university will charge you.
Do you honestly are telling us that you'd rather *lose* your housing than open a checking account and put $100 in it?
So let me get this straight, you don't trust the banks so much that you make your life clearly more difficult, but you're willing to trust advice from a bunch of geeks on Slashdot? Maybe we're all out to get you too!
I mean all a dollar is is a promise of payment from the US teasury - essentially a big bank. Do all your dealing in precious metals.
You get over it. That's what you do. If you're too chickenshit to even open up a chequing or credit account that you wouldn't even use save for the occasional transaction that must be done using a verifiable electronic method, you are not going to make it very far in this world. You won't ever be able to get a place you can call your own; you will have difficulties getting some kinds of jobs if you don't have a demonstrable credit history; you won't be able to get a variety of services. Sure, you can go to the local Western Union and constantly have to make money orders for everything, but then you'd constantly have to carry hundreds if not thousands of dollars around with you (how safe is that?) and you have to pay out of your own pocket every time. Plus, to most people, you won't look like you've got your shit together if you're constantly paying for everything with money orders. People that you want most to trust you, won't.
And how the heck do you plan on saving money? Put it in a shoebox under your bed? What if your place burns down in a fire, or what if someone breaks in and steals it? Insurance companies won't replace lost or stolen cash. If your credit card or bank card gets stolen and used for fraud, you almost certainly will get your money back -- that's the beauty of little electronic footprints and camera footage.
First, the answer has already been posted. Get a money order.
Two, you are an idiot if you pay cash to the university. You don't trust banks but you are willing to trust a university? Your trust issues are more then a little fucked up. If you pay cash to a university, you have one less piece of a paper trail should the university turn around and screw you... and screw you they often do. Universities are notorious for piss poor management, lost bills, and all other manner of headaches. Despite the general incompetence of most universities, the one thing you can always fall back on is that if they charge you electronically there is not only their receipt, but a transaction from your bank as well. When you go to dispute your bill, you will be armed with a very clear record of how they fucked up. Your trust priorities are a little confused if you think that a bank is more likely to screw you then a university.
I highly suggest making friends with money orders, refillable credit cards, or some other method of paying besides cash. Only using cash will keep you from doing some very simple things, like ordering stuff online, sending checks in the mail, etc.
I am not sure if you are paranoid, trying to dodge taxes, or just are not happy with the crop of crazy groups available at universities and decided to start your own but you are likely to find the all cash world not worth whatever you are getting. Sure, you might dodge a few taxes, but the amount you pay in pain and the inability to easily use basic services is likely to be far worse then Uncle Sam's FICA taxes. If you are just paranoid... well, I suggest seeing a doctor with the power to prescribe medication. Uncle Sam really doesn't give a shit that you had to pay a school deposit. Really.
I don't get it. You don't trust banks, but you trust the Federal Reserve ? The people who can and do print money like it grows on trees and in cotton fields ?
In Soviet America the banks rob you!
You will need credit. Not just to buy and sell. To get an apartment. To get a job. To forge other relationships with various institutions that want to evaluate your trustworthiness with something other than your own claims about yourself.
It's regrettable, maybe (certainly I think so), but it's also damn tough to live any other way in the end. A life without credit is a life with many fewer opportunities and many fewer potential relationships. Not just slightly fewer, but fewer to a crippling extent.
But credit is not something that exists here, now, it is something that exists through your own financial history of using it. That is to say it's circular: you get a little, you use that little, then you get a little more, then you use that little more, etc. You only get Credit (big 'C') by using your credit (small 'c') responsibly over time. The later you start, the later you'll actually get there.
If you're over 20 and you haven't started already, you're way behind the game. By the time you're 30 and haven't started, most institutions won't extend you any anymore. They'll just paint you as "different." They don't care whether you're different in a bad or good way for not having credit; they just don't want to do business with people who are "different." Because "different" people might respond to responsibilities in "different" ways from the ways in which members of society typically do.
My advice: go open a bank account and put some money in it. Leave a balance of a few hundred dollars there for a few months, then get a credit card with that bank. Use the damn card. Pay off your balance. Even if you just do $20 a month, i.e. toilet paper and granola bars, on the card. Just to get a credit history going on.
And later on, if you find yourself in this situation again, you'll have a bank account that you can quickly deposit some cash in and use a Visa/Mastercard debit card against.
STOP . AMERICA . NOW
...but the policy would apply to all housing students. I don't know how many students are housed at UIC, but if 10,000 students paid cash in the last few days before the deadline (a not unrealistic situation at a large state university which may have 20,000 housed students), the housing authority could be holding $1 million in cash, in small bills. The security required for this, both physical (i.e., safes, cameras, limited access to certain areas) and financial (receipts, auditing, etc.) would be a major pain. (I know that if I were managing that department, establishing a no-cash policy would be my first act.) There are often valid legal (liability -- after all, this is the U.S. -- corporate structure, etc.) and accounting reasons for separating university housing (or even specific fees) from the university bursar, so the fact that he can't just have the bursar -- who may be able to accept cash -- debit his account isn't surprising, either.
One of the main functions of college is to prepare young people for the Real World(tm) -- a place where you will often face people and entities that are not the slightest bit interested in what you want. Considering the needs of others, and not just your own desires, has a name: Maturity.
The "grown up job that doesn't pay cash" is really the only big problem, but even then you can go to a check cashing place and pay an exorbitant rate to get your cash. I mean, you don't *have* to do direct deposit. Manage your expenses wisely, and you'll never need a loan or a mortgage.
If you need a credit card equivalent, try PrivaCash. I heard about it on a privacy website. It's basically a pre-paid debit card that isn't tied to your name. You can pick up preloaded cards in stores, but if you want to reload them, you have to deal with the bank that backs them. You can't do things like rent cars or do other things where access to a debt source is used in the place of a deposit, but you can make purchases online.
Really, though, unless you are planning on living completely off the record as much as possible once your stint in a university is done, go for a credit union. It's like a bank, only not evil (or at worst significantly less evil). Avoiding a bank is very, very hard in modern life. For more details about what you lose in terms of privacy and how to protect yourself to a limited extent, check out the book "How to be Invisible" by C.C. Luna.
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Posting anon, for obvious reasons.
Back in the day, we had a pissed off taxpayer and his wife bring in several thousand dollars in pennies. At the time, we had real teller functions in most cities and they took their money-handling chores seriously and by-the-book. All cash payments were *required* (no exceptions) to be counted out twice in the presence of the person paying.
The manager saw the situation, got approval to put a teller on overtime, and started counting. They stressed to the taxpayers that they *must* remain present during the count. This was fairly early in the morning. After a few hours, some things began to change. Everytime the taxpayer needed to go to the bathroom, the count had to stop and everyone left the room. No lunch. No breaks.
Asshole taxpayer got bored. Then he got tired and cranky. Then he and his wife got into it. A screaming match ensued with the wife berating her husband for his stupid idea. "Yeah, you really showed them, didn't you?!" By that evening, she ripped the car keys out of his hand and left, telling him he could get a cab home. This was in a large, non-compact city with poor public transport and, at the time, only a shell of a taxi system. Telling him to catch a cab home was the equivalent of telling him to burn in hell.
Around midnight, the count finished. The jerk was shellshocked. He called a cab and proceeded to go stand out by the highway and wait for it. I don't know if it ever came.
I feel certain, however, that Mr. Idiot never tried another stunt like that.
What you describe is extremely counterproductive for landlords. Where to begin?
- As a landlord, you don't pay much tax on your buildings. Because you're only paying tax on your profits, and expenses are astronomical in the rental industry, and you are allowed to depreciate your property for tax purposes, often landlords will show a tax LOSS (or a modest profit), even while turning plenty of profit. Even if you underreport your income, you won't decrease your tax liability by much or anything at all.
- When you are applying for a loan or attempting to sell a building, you want to show that building to be operating as profitably as possible. Non-residential real estate is priced based on a multiple of the building's earnings (as opposed to comps), so if you are only declaring 50% or 75% of your rental receipts, you have just decreased the value of your building! Also, you will make it much harder to get a loan because banks want to see earnings. And yes, they absolutely do look at your tax returns.
- When deciding where to be, erm.., creative on your taxes, always remember the following maxim: If you're caught overdeducting, you pay a fine. If you underreport income, you go to jail.
- You open yourself up to fair housing problems. Picture this: a tenant doesn't pay his rent, so you evict. Nothing fancy there. But let's say that this nonpaying tenant is black, and wants to mess with you because he's mad that you evicted him (or he really feels discriminated against. Doesn't matter.).
Bottom line, this is really the wrong industry to underreport your income in. This is why, even with all of the shady landlords out there, you never see landlords being busted for underreporting.Example. Many landlords like a unit to cash flow $100/mo after expenses (mortgage, taxes, insurance, repairs, maintenance, advertising, vacancy, collections, credit loss, etc.) That $100/mo can easily be swallowed up by depreciating the building. Of course, depreciating the building will lower your cost basis and increase your capital gain when you sell the property, but google "1031" for more information on how to fix that little snag.
He calls some infomercial contingency-fee lawyer, sues you for fair housing violations, and during discovery, finds out that ALL of your tenants are underpaying. By 25-50%! But a quick glance at the court records reveals that you did not evict all of them. Why did you single out this one tenant, hmm? Oh, you are in for a costly court battle, settlement, and/or judgment now. Unless you are prepared to testify under oath that you belong in jail for underreporting your income. (And prepared to pay your attorney $10,000.00 for the privilege)
They don't grade fathers, but if your daughter's a stripper, you fucked up. --Chris Rock
The post office will provide you with a money order for a reasonable fee, and there's no place in the country that will refuse a postal money order.
It doesn't hurt to be nice.
I'll have no part of that for a few reasons:
- I live in the city. All the even close to affordable houses are well outside what I consider a reasonable commuting range.
- It's just plain cheaper to rent. Sure, I'm not storing up equity, but really neither are a lot of people on subprime mortgages. At least the money I'm saving is being put into investments.
- I predict that once the baby boomers get a decade into retirement (with no kids in the house and failing health) a lot of them are going to start moving out of houses; many of them will be moving into "assisted living" centers. Houses in areas near good schools are going to get a LOT cheaper in the next ten years. At that time, I'll reevaluate whether owning a home is a good thing or not, but unless you can solidly plan to put down roots for the next 30 years where you are right now, owning a home might be an unwise investment.
Leasing is silly if your end goal is to own.So? What makes owning such a great goal to have in the first place? If your privacy or your paranoia is so important to you that you'd go through life without a bank account, then going without owning the house you live in isn't so bad in comparison.
Frankly, I'm paying about 1/2 to 2/3 what I'd pay for a mortgage on a home or condo in my area. My insurance is significantly cheaper, and I wouldn't have enough deductions to qualify for a tax break anyway.
Consider this wise or unwise as you wish, but I was able to live for half a year without a paycheck to go volunteer in the local election last year, and I had no fear of losing a place to live. I know that I'm fortunate to be in a very high income bracket due to my choice of careers, but I could get by comfortably with a third of my income because I live below my means.
Home ownership is overrated, if you ask me.
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