This paper is motivated by empirical observations on the comovements of cur
rency velocity, inflation, and the relative size of the credit services sec
tor. We document these comovements and incorporate into a monetary growth m
odel a credit services sector that provides services that help people econo
mize on money. Our model makes two new contributions. First, we show that d
irect evidence on the appropriately defined credit service sector for the U
nited States is consistent with the welfare cost measured using an estimate
d money demand schedule. Second, we provide estimates of the welfare cost o
f inflation that have some new features.