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How to Make Big Financial Decisions
How do you move money? Do you pay cash? Write checks? Pay electronically from your bank account? Are you a fan of Venmo, Pay Pal, or Zelle? However you move money today, I’ll bet you are doing it very differently 5 years from now. I’m going to talk about a few trends in the works that I think will affect how we move money from one place to the next.
No more Paper Treasury Checks – On March 25th, President Trump signed an Executive Order for the government to phase out the usage of paper checks by September 30th. This would affect Social Security checks and tax refunds. The White House wants to go this route to save costs. They also want to speed up the process of payments getting to the appropriate place. Lastly, they want to cut down on check fraud. As a side note, did you realize that check fraud is rampant? According to Kiplinger, cases involving checks being stolen out of the mail doubled between 2021 and 2023. Checks are being stolen out of mailboxes or from the postal service and the payee is being changed to someone else. The person who writes the check sees that it cleared, but then the original payee calls to say that they never received the check. It’s a real problem costing in the hundreds of millions of dollars annually. Well, would you believe 450,000 individuals still receive paper social security checks, according to Kiplinger? This move to electronic Federal payments will push some of these people to get bank accounts. If you have to have an electronic means to receive money from the government very soon, I think that will accelerate the trend of paper checks becoming a thing of the past. So, a quick tip here: set up a safe electronic means to pay as many of your bills as possible – especially if you are a small business.
Caps on Credit Card Fees – We also use credit cards to move money and pay for things, don’t we? You might be interested to know that both the Senate and the House have bills under consideration to lower the cap on rates that credit cards can charge. Most credit cards eventually charge around 24% as their interest rate. In most states this is the maximum rate that can be charged by banks under what are called usury laws. The bills both propose capping this rate at 10%. This may sound really good on the surface. For people trying to dig out of credit card debt, relief on the rate charged would seem like a really good thing. But there can be unintended consequences from even well-intentioned bills. And this could affect whether we use credit cards in the future to pay for things and move money.
First of all, credit card companies are able to give their cards to almost anyone because these higher rates help pay for their losses. If you cap the interest rate at 10%, these companies will likely become more restricted in their offerings. This means fewer people will qualify and those folks will likely be pushed to predatory lenders who are charging a whole lot more than 24% to borrow money. This could actually end up harming the people it is intended to help.
A secondary implication is that reward programs are likely to be slimmed down or reduced all together. If profit margins go way down for these companies they won’t be able to offer rewards to the people who use their cards and pay off their balances. No rewards reduce the incentive for higher credit score borrowers to use credit cards. So, they may move on to debit cards, fin tech companies or even crypto.
Thirdly, it risks setting a dangerous precedent for more price controls. In most historic examples, price controls actually end up costing everyone more in the long run because it reduces competition. Stimulating competition is what keeps prices in check, not stifling it. The way we pay for things is rapidly changing, and if this cap gets through Congress, it will only accelerate that transition.
A Crypto Reserve – Speaking of the people paying for things with crypto, On March 2nd, President Trump announced the establishment of the U.S. Strategic Crypto Reserve. In so doing, the President planted a flag of sorts that the government sees long term value in certain digital assets and that it wants to establish a way to buy and hold them over the long run. Four digital assets were chosen: Bitcoin, Ethereum, XRP and Cardano. If you want to learn more about Bitcoin in particular, I did an episode called “What is Bitcoin? A Layman’s Explanation” on May 25th, 2021, and “Bitcoin 102” on March 19th, 2024. Digital currency can be really confusing, but I think there’s a role for these assets in the future. To be clear, I’m not recommending that you buy these assets today – but I am saying that I think it’s worth your time to learn more about them. Exactly what their role will be in the future is uncertain, but the President’s bold move to, in some ways, legitimize these four crypto currencies could give it some kind of role in the future. Some roles crypto might play in the future could be an alternative store of value and a faster, alternative way to make payments.
You know as I highlighted those previous episodes we did on Bitcoin, it made me realize we’ve been doing this podcast for nearly 5 years. We started this podcast first of all because we want to be helpful. We want to provide financial information to help you make better financial decisions. But we also want to build credibility with you. If you’re already doing business with us, we hope to do more business with you. And if we’ve never done business with you, we hope you’ll give us a shot. We are a credible, compassionate and competent financial solutions provider. You’ve got financial needs, and we’ve got financial solutions. Start your financial conversation today by visiting Foundationbank.org. We also hope you’ll subscribe to this podcast to it in your favorite podcast app and share it on social media. Until our next episode, God bless you.
-President Chad P. Wilson, CFP
Today’s episode of “Money Matters” was written and recorded by President Chad P. Wilson of Foundation Bank/McKenzie Banking Company on May 06, 2025. This episode does not constitute financial advice. Please consult a financial professional to discuss your specific needs. Any rates mentioned are subject to change and are accurate as of the recording date. Foundation Bank/MBC is an Equal Housing Lender, Member FDIC.