Biztown Unit 1 Lesson 4 Types of Payments (JAMES)

Spending, Saving and Investing

💰 Money that you receive for working is called income.
💰 Most people use their income to meet their needs like housing, food, and transportation.
💰 Income is also used to buy things that you want or for saving for the future.
💰 Part of the money that you will receive as income is collected by the government as taxes.

Multiple Choice

What is income?

• state taxes

• bills for services

• business choices

• money for working

Multiple Choice

What is money collected by the government?

• bills

• taxes

• savings

• income

Multiple Choice

How do most people pay for their wants and needs?

• working

• playing

• traveling

• spending

Comparing Payments - Cash

Cash - paper bills and coins created by the government

✅ easy to use, accepted nearly everywhere, fits in your pocket, can only spend what you have
❌ cannot be replaced if lost or stolen, not easy to track spending

Comparing Payments - Check

Check - a written order to a bank to pay money from a bank account to a person or business

✅ easy to track, can safely be mailed
❌ slow to write, a lot to carry, money is not always taken out of the bank right away, not accepted everywhere

Comparing Payments - Credit Card

Credit Card - a card that allows the holder to buy goods and services by taking out a bank loan for purchases

✅ items can be purchased without having the money to pay for them, handy for emergency purchases, convenient
❌ possible yearly fee, interest charged on unpaid balances, can lead to financial difficulties if misused

Comparing Payments - Debit Card

Debit Card - a card that provides electronic access to a personal bank account; along with the similar ATM card, can be used to complete bank transactions like a check

✅ quick and easy to use, funds immediately deducted from your account, no bill in the future, don't have to carry cash, relatively safe because you are the only person who knows your PIN number
❌ harder to keep track of spending, easy to lose, possibility of identity theft, must remember your pin number

Debit and Credit Cards

💳 A debit card is tied to a banking checking account. This means that the money someone spends with their debit card is money that they have available in their account.
💳 When using a debit card, the user must be careful about what they are spending. Their bank will charge them an overdraft fee if they spend more than what they have in their account.

Debit and Credit Cards

💳 A credit card allows a person to go into debt to purchase their wants and needs.
💳 Debt is money that one person owes another. When a person borrows money from a bank, that money must be paid back, usually with interest.

Multiple Choice

What is is called when one person owes another person owes another person money?

• a fee

• debt

• credit

• interest

Multiple Choice

When do people get overdraft fees?

• when they open a savings account

• when they buy something with credit

• when they make purchases with interest fees

• when they spend more than is in their account

Multiple Choice

A debit card is tied to what?

• cost

• debt

• a banking account

• credit finance fees

Comparing Payments - Other Kinds

Electronic Payment- payment online with your debit or credit card information; sometimes also can use your bank account information.
Gift Card- a card purchased in advance in a specific monetary value
Prepaid Card- a card that allows you to spend only the amount you have pre-deposited onto it