How Does Money Work?

Money is a form of payment that is used to purchase goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context.

An economy is an area of the production, distribution and trade, as well as consumption of goods and services.

Interchange is money banks make from processing credit and debit transactions. Banks make the majority while a little goes to the merchant. Every time you swipe your card (buy something) at a store, the store, or merchant, pays an interchange fee.

If you dont pay your rent and bills by the deadline than your landlord will evict you. The landlord can also report your overdue rent to a credit reporting agency.

A bank makes money by loaning out money. Even with low lending rates, banks usually make more than 14% return on their share holders. This is done by the process of leverage. Banks also make money by selling debt.

The Federal Reserve System is the main banking system of the United States of America.