A/ Banking and making purchases
when you buy something in a store you may be asked: "How do you want to pas?" You can answer: "
Cash. / Check. / With a credit Card."
In a bank you usually have a
checking account. you
make deposits (put money in) and
withdrawals (take money out). You
write checks on the account to
pay bills. You may also have a
savings account, which usually pays you
interest - money paid for keeping your savings there. The bank sends you a regular
bank statement showing the activity in your account. If you take out more money from an account than you have in it (usually by writing checks), your account is
overdrawn, a situation to be avoided! If you write a check but your account has
insufficient funds to cover it, the check may
bounce (colloquial use); that is, the back refused payment. Banks also offer
certificates of deposit (CDs), which pay you higher interest rates than savings accounts. However, money can't be withdrawn from a CD for a specific time without a
penalty, a fee charged for early withdrawals.
Sometimes the bank may
lend you money - this is called a
bank loan. If a bank (or a savings &loan institution) lends you money to buy a home, it is called a
mortgage. You pay back the amount of the loan - the
principal - with interest. Banks have higher
interest rates for borrowers than for savers.
When you use a
credit card to make purchases, you receive a
monthly statement from the credit card company. The
billing date is the date the statement was prepared, the
balance is the amount you owe, and the
due date is the date by which you must pay. However, you can pay a part of the balance and owe the rest, but you'll incur a
finance charge, which is usually rather high.
Money that you pay for services (e.g., to a lawyer) is usually called a
fee or
fees.
Money paid for student courses (e.g., at a university) is called
tuition; other costs paid by students are called
fees (e.g., registration / laboratory fee).
Money paid for a trip is a
fare.
B/ Public finance
National and local governments collect money from residents through
taxes. Income tax is collected on
wages and
salaries. Inheritance tax is collected on what people inherit from others upon death.
Customs duties or
excise duties are paid on certain goods imported from other countries.
Sales tax is a percentage of the price of goods and services, added to the total cost.
Value added tax (VAT) (found in the U.K. and other countries, but not in the U.S.) is a tax based on value, added to a product at each stage of production. Companies pay
corporate taxes on their profits.
Every country has its own
currency. The
rates of exchange are published daily, and you ca check, for example, how many yen there are currently to the dollar.
(From Vocabulary in Use Upper Intermediate by Michael McCarthy, Felicity ODell, Ellen Shaw)
© Cambridge University Press 1997)
