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Paper Currency

Bank Note and Paper Currency Collecting

Paper Currency Collecting

Although not as common as coin collecting, collecting paper money or banknotes is a unique and enjoyable hobby for many people.

Paper money was a later invention than coins and is more fragile, so it cannot be used to trace the history of the ancient world.

Instead, paper currency collections tell the story of our more recent past.

United States currency forms the basis of many collections, although world bank notes are also popular.

Banknotes and paper currency are physically larger than coins and so engravers could embellish them with much more elaborate designs.

If you are interested in pursuing this hobby, provided here is some basic information to help you get started.

What Types of Paper Money Do People Collect?

Like coin collectors, paper money collectors ran the gamut of interests.

Particularly common collections include Confederate States money, US fractional currency (1800s notes issued for less than one dollar), rare world notes, current world notes and error notes.

There is a lot of variation even within these categories. For example, someone might collect notes bearing a picture of Queen Elizabeth, while someone else might focus on collecting notes from every country in existence today.

Many smaller countries have gone into printing beautiful original banknotes and stamps as a revenue generating measure. If you want to get involved collecting these it is easy to get crisp uncirculated notes, especially when traveling. This will make for a more attractive and valuable collection.

How Is Paper Currency Graded?

There is no official grading system for paper currency. However, certain traditions are widely accepted. These include the following:

• Crisp Uncirculated (CU or UNC) – As the name implies, these bills have never been used and are in perfect condition. Some dealers further distinguish these notes based on printing considerations.
• Almost Uncirculated (AU) – These notes are not quite as perfect as CU notes. There may be the tiniest fold or imperfection on the note, but the surface is not broken.
• Extremely Fine (XF or EF) – The corners might be slightly rounded. There may be up to three small folds or one large fold.
• Very Fine (VF) – The bill may show several folds, but is still crisp and clean.

Five Dollar Silver Certificate
• Fine (F) – This represents a circulated bill in average condition. There may be creases and folds, but the bill is not torn into the printing.
• Very Good (VG) – The bill is actually very bad. It is no longer crisp and may have tears or small holes. This is the quality of the poorer bills in your wallet.
• Good (G) – At this point, the bill may bear graffiti or small missing pieces.
• Fair (F) – These bills may be missing larger pieces. They appear worn out and severely damaged.
• Poor (P) – Reserved for bills in the very worst condition.

Rarity

As I mentioned before, banknotes, being made of paper, are very fragile, especially as they age. They can become brittle and tear easily. Inks can fade and paper can become yellow or discolored.

So while condition is a factor in determing value, rarity is more important.

Some notes only survive in museum collections. Others are so rare as to be worth a small fortune.

Before investing in rare banknotes, do your homework. While traditional coin magazines will cover banknotes from time to time, probably the best source of information for paper currency collectors is Bank Note Reporter. This magazine contains price guides, market trends and more all geared specifically toward paper money collectors.

Displaying and Protecting Paper Currency

Bank notes can be framed and hung on the wall, just like stock certificates. Hire a good framer, use acid free mats and UV protective glass. A properly framed bill will be protected from the elements and not be subject to damage from handling.

You can also buy albums designed for paper money or sleeves and plastic protectors. Make sure they will not leach chemicals that can harm the note. Keep your notes stored in in a cool, dark and dry place.

It goes without saying that you shouldn't handle valuable paper currency with your bare hands - wear cotton gloves. Be especially careful not to crease or wrinkle the note.

With older banknotes, the less handling the better. The paper can be quite fragile and unintended damage could easily occur.

How Can I Get Started Collecting Paper Currency?

Paper currency storefronts are less common than those for coin collectors. If there happens to be one in your area, take advantage of the opportunity to talk to a dealer face to face.

Otherwise, a great first step is a subscription to Bank Note Reporter. This monthly magazine is devoted to all aspects of paper money collecting, and also runs a large classified section.

Paper currency collecting is a unique and interesting hobby.

Collectors tend to be a laid-back and easygoing group. You can find collectors’ groups online, where you will meet others who share your interests. This is a great way to share information and learn more about the hobby as well.

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