1. Types of Money How should I pay?

2. Types of money I listed these in the order I think you are most likely to encounter them.  Cash  Check  Debit card (use for a Debit or Credit transaction)  Credit card (use for a Credit transaction or a cash advance)  Electronic Funds Transfer (EFT)  Money Order  Cashier’s Check  Certified Check  Traveler’s Check

3. Cash  Anonymity  No purchase tracking  Mindful spending (cash can seem more real than plastic)  No purchase protection  Dr. Kerby uses for tipping at restaurants, flea market/yardsale, or anywhere I want to be anonymouse

4. Check “A written order instructing a bank to pay upon its presentation to the person designated in it, or to the person possessing it, a certain sum of money from the account of the person who draws it.” Free Dictionary.com  At some point in your life you will need to write a personal check.  You may also receive checks for:  Gifts  Working  Rebates on purchases  Stuff you sell to other people  Dr. Kerby uses for charitable contributions

5. Debit Card  Debit cards are associated with your checking or savings account; money is deducted right away.  Purchases can be made 2 ways 1. As a Debit. 1. Enter your pin number 2. May get cash back 2. As a Credit. It is still actually a debit purchase as the funds will be directly deducted from your checking or savings account. 1. Signature may be required 3. I use my debit card when it offers cash-back rewards or to get cash from the ATM.

6. Credit Card  Allows you to pay for purchases with the bank’s money.  Credit purchases will be added to your credit card balance; you pay when the monthly statement comes.  Dr. Kerby uses her credit card for everything she can to get the cash-back rewards. Video: Difference between Debit and Credit cards (start at 0:30) and Debit vs. CreditDifference between Debit and Credit cards Debit vs. Credit

7. Electronic funds transfer  EFTs are payments made from one person or organization to another using a computerized device.  EFTs include:  Direct-debit transactions  Wire transfers  Direct deposits  ATM withdrawals  Online bill pay services  Transactions are processed through the Automated Clearing House (ACH) network, the secure transfer system of the Federal Reserve that connects all U.S. banks, credit unions and other financial institutions. Source: investinganswer.cominvestinganswer.com

8. Electronic funds transfer  You might use it for  Direct deposit of your paycheck into your checking or savings account  Repeating payments you make (Ex: car loan)  Paying for purchases  Sending and receiving money with friends/family (see PayPal)PayPal  Note: It costs the U.S. government $1.03 to issue each check payment, it costs only 10.5 cents to issue an EFT payment.  Dr. Kerby uses EFTs to pay her mortgage and car loan and also received her pay through direct deposit.

9. Money order  Alterative to using a personal check  Safe – don’t have to share your checking account information  Purchase with cash, debit or credit  Purchase at bank, credit union, Post Office  Fees apply – $1.25 – 1.50 for domestic  Maximum $1000 face value  Can use stop payment and tracking just like a check  Find out what you need to know about “Accepting Money Orders” at usps.com usps.com  Dr. Kerby uses money orders for online purchases when Paypal is not an option.  Sources: ohiocatholicfcu, about.com and USPS.comohiocatholicfcuabout.comUSPS.com

10. Cashier’s check  As good as cash because clear immediately (personal check sometimes take a few days to clear before you can withdraw the funds)  Guaranteed by the bank it’s drawn on; banks issue cashier’s check with bank funds and signs it.  Can be more secure than a personal check.  Required for certain transactions such as real estate transfers.  You have to go to a bank to get a cashier’s check. More info at wikihow.comwikihow.com  You also have to pay a fee, from $0 to $10$0 to $10  I have used for real estate; transferring $$$

11. Certified check  A personal check can be certified by the bank they are drawn on; the bank where the check payer's funds are deposited.  “A certified check is the written acceptance for a specific check (essentially an acknowledgment), by the Bank, that the Bank's Customer's signature on that check (1) is genuine and (2) there are sufficient funds in the Customer's account to honor the check when it is properly presented for payment. The check is signed by both the Customer and the Bank.” Credittoday.net  May be required for a car purchase.  You can get one from your bank  Fees apply ($5 - $10)

12. Traveler’s check  Traveler’s checks are paper money that can be used like cash; usually used for travel.  Can protect you from identity theft because there is no personal information on them.  Safer than carrying cash plus no ATM fees  Unlike cash, they can be replaced if lost or stolen as long as you have your receipt.  Fees apply, usually 1-2%  Purchase at a bank or through American Express or AAA.  Video: American Express Traveler's Checks AdAmerican Express Traveler's Checks Ad

13. Assignment Create a comparison table. List each type of money we talked (cash, check, etc.) on one side. On the other side list the situation where that type of money would be the best choice for you. For example, you might use cash when you go to the Flea Market; everyone’s answers will be different. Note: Don’t just used my examples … I want you to put some thought into it and say where you would use these different payment options. Create the table in Word and upload to Moodle, Unit 3 "Types of Money Comparison Table". You may work with a partner.