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Transcript: Money and Credit Characteristics of Currency Every country in the world has an official form of currency. The word currency is another term for coins and paper money. Whatever it is called, all currencies share at least three common features: 1. Currency must be easy to carry. It must be small and light so people can carry it with them for everyday use. 2. Currency must be durable, or last a long time. It should not wear out too quickly or fall apart. 3. Currency must be made in a standard form and must be considered legal ten- der by the government that issues it. In this way, people can be certain that their coins and bills will be accepted in exchange for goods and services. Checks and Debit Cards Checks and Debit Cards Caching Checks Checks are just pieces of paper. They are not legal tender because they are not issued or guaranteed by the federal government. To write a check for a purchase, you must have a particular kind of bank account—usually called a checking account—and enough money in that account to cover the check. Girls best friend Debit Cards Today more and more people prefer to make payments from their checking accounts with debit cards instead of writing checks. Debit cards are like electronic checks. Instead of writing out a check in the store, you can give the cashier your debit card. The money will be deducted from your account just like with a check. Debit cards offer an increasingly popular alternative to carrying cash or a checkbook. Credit and the Economy Credits and the Economy Sometimes I come to your roommate wanted to make a purchase but does not have enough cash in his or her wallet or bank account. When this happens that person needs access to credit. Buying something on credit means that a person is able to buy something now with the promise to pay for it later. Credit is a loan of money that is repaid plus interest. Interest is a payment charged for borrowed money. Charge and Credit Cards Charge and Credit Cards some stores issued charge cards too many of their customers. A charge card is a form of borrowing. Customers can buy items without paying for them immediately because the store lends them the money for the purchase. The amount of the purchase is added to the customer's account balance and build to the customer each month. The customer then sent the store appointment for some or all of the amount due. A minimum payment is typically required. Usually there is no interest charged in if the customer pays the full balance by the due date. if the customer only pays part of the bands, the store usually charges interest on the remaining amount. $ and the Family Credit and the Family If used wisely, credit can help the average American family. few young families have saved enough money to acquire a house. Yet borrowing from a bank or mortgage company to do so will give them the extra money they need. They can then pay the loan of gradually from money they earn. Of course, they also have to pay interest on the loan, often for 30 years. Loans payable over long periods are called long-term credit. most American families used long-term credit to buy cars other families use it for buying major appliances and furniture. If a family plans to pay for an item within just a few weeks or months, it needs only short-term credit. This type of credit can be especially helpful for emergency purchases, so just a new furnace or refrigerator to replace the one that broke. the business often use credit rather than currency in most cells involving large amounts of goods. Credit helps merchants by allowing them to buy more goods at one time, which means they have more merchandise to sell to their customers. imagine that you are the owner of a snowboard shop and you need to stop 50 snowboards for the next season. If the board cost you $200 each, then you would need $10, 000 to pay for the shipment. but you may not have the money until you can sell all the boards. The snowboard manufacturer may agree to the lover the boards on credit, allowing you some. Of time to pay for the boards. Alternatively, you may arrange to borrow the money from a bank to pay for this shipment. Then you would repay the bank as the boards are sold. Business Credit and the Economy
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