What is Money???

•Money is the name given to the value we place on things. Generally accepted in exchange for goods

Nowadays, money is used instead of Bartering (or swapping)

What form of Money do you see?

Most Common Forms of Money!!

Forms of

Money

Cash Credit Cards and Laser Cards

Charge Cards

Cheques

Accepted all over the world

Issued by our Central Bank on behalf of ECB.

Money should be…• Divisable – Money should be able to be divided into smaller sums. For example, to give change

• Scarce: In order to have value.

• Durable – Money should last and not wear out after one use. People should be able to save their money without it fading away.

• Portable – Money works because it is handy. People can carry it around with them in their pockets.

Cheques!!-Note-we will learn more about cheques in chapter 10

Cheques are when we write a note to tell a shop to take a certain amount of money from our bank account.

The person writing the cheque is the drawerThe bank is the drawee-who we are taking the money fromThe person to who we make the cheque payable is the payee

Debit CardIssued to people with bank accounts

You receive a PIN (Personal Identity Number)

this can be used to withdraw money at an ATM (Automated Teller Machine)

or pay for things in the shop at the card machine( known as the chip and pin system)

Credit Card• Similar to Laser cards, but they differ as the money is not instantly

paid from the account of the person paying for the good, instead the credit card company pay it within a few days

• The credit card allows the buyer to spend more than is in their account up to an agreed limit with the credit card company

• No interest is paid provided the full amount is paid within 28 days of the account statement being issued. If the full amount is not paid, a high amount of interest applies

Debit vs Credit Card• Both can be used, as an alternative to cash.

• Debit cards are used like credit cards, but with debit cards the money must be in your account before you use it, whereas with credit cards you can spend money that is not in your account.

• No danger of getting into debt with a debit card. Big danger with a credit card.

• You will not end up spending your income on interest with a debit card.

http://youtu.be/5pzMGtPl3hA

Other Forms of Money

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Bank Draft: We buy this cheque from the bank to pay large sums of money. Usually used to pay large sums of money where cheques are not acceptable

Travellers Cheques: Pre-printed and numbered cheques in specific types of currencies, can be cancelled by the buyer from the bank if they are lost or stolen

Smart Card: Preload your account and then pay for things. Example: O2 Money card

http://youtu.be/vizOe4HZtSk

Other Payment Methods• Standing Order: Asking the bank to pay a fixed sum of money to a stated person- e.g. mortgage payments

• Credit Transfer: Transfer money from your own account to another persons bank account- can be done through internet banking

• PayPath: Transfer of wages from an employers bank account to an employees bank account

• Paypal: Safe way to pay for goods online. Will often see this option on E-BAY.

Direct Debit• Type of preauthorized payment under which an account

holder authorizes a bank to pay a fixed amount (such as mortgage payment or rent) or variable amounts (such as those called for in bills or invoices) directly to a landlord, bank, supplier or utility company at regular (usually monthly) intervals