Chapter 1 CASH AND CREDIT People use money to buy things they need or want Sometimes they pay with cash Other times they pay with a credit card These two methods of payment may seem similar Most stores accept both However they are very different Kids usually spend and save cash What is another way to pay that adults sometimes use
Cash is money you have earned Adults earn money from their jobs You might earn money by doing chores at home Maybe you get paid for babysitting The money you earn belongs to you Using coins or paper bills is the simplest way to spend your money Credit cards are commonly used for online shopping
Debit cards and credit cards look the same but they work very differently A debit card is another way to spend money It is a small plastic card To use it you slide the card through a machine at a cash register The money you spend comes out of your bank account This means that debit cards let you spend the money you already have Credit cards are different They let you use the credit card company's money to pay for things You must pay the company back later
Using Credit Using credit is borrowing money to buy something You might borrow money from a friend People also borrow money from banks A kid might borrow money from a parent for a new bike Adults might borrow money from a bank to buy a car or a home Kids sometimes borrow money from a parent
