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Should I Buy Circulated or Uncirculated Coins?

If you’re pondering the question of whether you should buy circulated or uncirculated coins, chances are you are thinking about starting a coin collection.

Although there are various grades and assessments ascribed to different coins, the basics begin at the question of whether they are circulated or uncirculated.

In this guide we will go over the key differences between the two types of coin, including the pros and cons of each and verdict on overall value. 

Pros and cons of buying circulated coins

Circulated coins have limited uses for a collector who is potentially investing and selling for profit. If you are looking just to collect coins and have no real interest in potential value and profit, buying circulated coins is fine. For most people though, this is not ideal.

The obvious detraction to buying circulated coins is that they are unlikely to increase in value over time. A circulated coin will remain face value for the duration of its lifespan, there are very few exceptions to this.

Pros and cons of buying uncirculated coins

Uncirculated coins are the coin of choice for collectors. An uncirculated coin is one that has not reached commerce circulation, and therefore has gone unhandled by the general public. Usually uncirculated coins are almost entirely blemish free, although this isn’t always the case. The main attraction of buying uncirculated coins is usually for collectors, as they will often increase significantly in value over time and be worth more than their circulated counterparts.

An example of a valuable uncirculated coin is the 2018 American Eagle Once Ounce Gold Uncirculated Coin, with only 10,000 coins available.

Initial drawbacks of buying uncirculated coins are their rarity and expense. It’s very unlikely to find old coins in uncirculated condition, and if you do they are likely to cost a much higher price than face value. This can make sourcing specific coins difficult.

That is why buying uncirculated coins is an avenue for acquiring them.

Are circulated coins worth anything?

This depends entirely on your perspective. Strictly speaking, a circulated coin will be worth its face value and nothing more. Therefore, they are worth something, even if that value is not particularly high.

Furthermore, some circulated coins can sometimes be more valuable depending on the situation, although this is rare. In the UK for example, there are specific designs made on 50 pence pieces that are rarer than others.

Can you use uncirculated coins as money?

This also depends from where you approach the question. An uncirculated coin is a coin that has not been put into public circulation. If it’s legal currency, it can be spent at any time - although this would remove its status as uncirculated. For some other uncirculated coins, they may still uncirculated for a reason. For example, they may be commemorative and only hold value as a collectors item. Therefore, banks and shops will be unlikely to accept them.

Though they may not serve as legal tender, a likely situation would be that a clerk or even a store manager, if offered uncirculated currency, would immediately be more than happy to accept the uncirculated currency, and likely take it for themselves and replace it with their own money.

To your right is an example of a coin that used to be in circulation with just 500 coins struck, but are now very difficult to find, since the U.S. Government melted down many of the coins: An original Confederate Half Dollar.

Final verdict: circulated vs uncirculated coins

The answer to this question is based entirely on what you will be using the coins for. As aforementioned, if you just want to start collecting coins for fun and have no intentions of building a completely “valuable” collection, then purchasing circulated coins to store will suit you just fine.

However, most people who start coin collecting do so to build a valuable portfolio they can trade or sell later on in life. If this is your goal, then your main aim should be to purchase uncirculated coins. This is because uncirculated coins will always hold the highest value, and will likely increase in value over time.