2. Introduction
• Thousands of years ago people had no system of
money as we know it today.
• They used the barter system of trading.
• Barter is the exchange of a good or service for
another good or service:
e.g. a bag of rice for a bag of beans.
3. Standing
order Interest-
Hire
free
purchase
credit
Cheque Methods Bank loan
of
Payment
Debit
Overdraft
card
Credit
Cash
card
4. Cash
Coins and notes are exchanged
for goods and services.
Cash is normally used for most
small purchases, such as food,
newspapers and bus tickets.
• Carrying a lot of cash around is
quite risky as it can be lost or
stolen.
5. Cheques
• Cheques are one of the most popular methods for
paying large bills.
A cheque is an official slip detailing an amount to be
paid in exchange for goods and services.
The sum of money is taken from the consumer’s
current account.
The counterfoil is used as a record of how money was
spent and is a form of receipt.
6. Cheques cont.
• When you pay by cheque, the supplier will usually ask
for your I.D. card.
If you have doubts that your chequebook or cheque
has been stolen or lost you must inform your branch
immediately.
Remember: Never write a ‘blank cheque’.
7. Cards (Plastic money)
There are a variety of cards a consumer can apply
for to use instead of cash.
These cards can mainly be divided into:
o Credit cards
o Debit cards.
8. 2. Credit Cards
There are many different credit cards.
Credit cards allow the consumer to buy goods and
services without the need for cash (like giving a
loan).
They allow the holder to borrow to a pre-set limit.
9. 1. Credit Cards cont.
Consumers must satisfy certain requirements
before being issued with a credit card.
Credit cards can be used at the Automated Teller
Machines (ATMs) or some points of sales
terminals.
• When withdrawing cash from ATMs
the bank will start charging interest
straight away.
10. 2. Debit Cards
Debit cards allow you to pay for goods
using funds transferred directly from
your bank account.
The balance in your bank account is
automatically checked before each
transaction.
11. 2. Debit Cards cont.
• The transaction will be effected only if there is
enough money in the account.
• With a debit card you can withdraw cash from an
ATM from funds which you already hold in your
account.
12. Some Useful Tips
Sign the card and write your I.D. card
number immediately
Memorise the PIN number
Keep card in a secure place
13. Keep a list or photocopy of all cards
Never lend your cards to others
Always take ATM receipts with you
14. Understand all applicable terms
and conditions
Never give your credit card number over
the phone
Never respond to e-mails requesting
your credit card number
15. Use secure sites when giving credit card
details over the internet
Check the amount on the credit card chit
before signing it
Settle any credit card bills on time
16. Hire Purchase
Hire purchase is used to buy expensive
items which a person cannot afford to pay
outright: e.g. a car
A down payment is usually paid and the balance is paid
over several months (monthly instalments).
17. Hire Purchase cont.
There could be an additional charge (interest) for
this service.
The finance company owns the item until payments
have been completed
If you fail to keep up your payments, the lender
may reclaim the good.
18. Standing Order
A Standing Order is an instruction to your bank to pay
a certain amount of money, regularly, on a specific
date, to a certain person or company.
Debts are paid directly from your account by your
bank.
19. Standing Order cont.
Standing orders can be used to pay rent, hire
purchase instalments, insurances etc.
This process saves you time.
It also saves you the trouble of remembering
when the amount has to be paid.
20. Interest-free credit
A number of large stores offer interest-free
credit on items bought.
Goods purchased are paid over several months.
No interest is paid on the money owed, unless
consumers do not pay within the agreed term.
21. Bank Loan
There are various loans that banks offer, such as home
loans, computer loans, car loans, flexi-credit etc.
A bank loan is granted to consumers who have made
special arrangements with the bank.
Monthly repayments are made over a
stated period of time.
• Interest is charged on the balance of
the money owed and depending on the
type of loan taken.
22. Overdraft
This is another service offered by the bank.
Consumers can take out more money than they have
in their account, up to an agreed amount.
Interest is usually payable on money overdrawn.
Sometimes, banks will agree a modest overdraft limit
on which no interest is payable.
Used mostly to avoid unnecessary
debt because of short-term problems:
e.g. unexpected medical expenses.
23. What we spoke
about today
Cash
Cheques
Credit cards
Debit cards
Hire purchase
Standing order
Interest-free credit
Bank loan
Overdraft
