Why does Joan Smith come to the bank?

A Credit Card
A: Excuse me. May I come in?
B: Yes, of course. What can I do for you?
A: I want to make clear something about the credit cards, because our university wants to give every teacher a credit card as a new-year gift. Is this a right place for that purpose?
B: Yes indeed. Please take a seat. My name is Jane Lee. I’m in charge of the Credit Card Department.
A: Oh, nice to meet you, Mr. Lee. This is my name card. I’m Jane Smith from Capital University.
B: Ok, Mrs. Smith. Tell me please what would you like to know?
A: Well, we know nowadays credit cards are very popular. Many feel that it will only be a matter of time before credit cards completely replace cash and checks for both individuals and organizations. But we are not very clear about what it is.
B: Credit cards, or bank credit cards are instruments issued by banks to carefully selected applicants.
A: I hear that with it you can do many things.
B: Yes. It can be for use in obtaining, on credit, consumer goods, services and other things when necessary.
A: One of our teachers told me that we can draw cash by using it.
B: Correct. They may also be used in obtaining cash. Under bank credit scheme, customers are provided, usually free of change, with a plastic card carrying a line of credit which varies according to the financial status of a card holder.
A: Yeah. I remember some people calling it plastic money.
B: It’s because the cards are made of plastics. They are generally called plastic cards and bank credit cards are merely a kind of such plastic cards.
A: What are the special features of this kind of card?
B: With a credit card, you can pay for purchases a month later, without any extra charge.
A: Sounds interesting. Another attractive point?
B: You may choose to make your payments over several months and pay only part of the total amount each month.
A: Well, Mr. Lee. This service seems too nice to be believed.
B: Yes, Mrs. Smith. But it’s true. However. In this case, the bank who sponsors the credit card, will add a small service charge to your total bill.
A: Look. There is no such thing as a free lunch.
B: Nevertheless, it is very convenient for the customer.
A: I see. It’s convenient indeed. What are its main characteristics?
B: With the credit card, you don’t have to carry much money. This is the main advantage of it.
A: Please explain it to me, Mr. Lee. I’m interested in it.
B: This is not only saves your time otherwise taken to make your trips to the bank to cash checks or withdraw cash,  but also will relieves you from worrying about losing the money through carelessness or theft.
A: That’s great for our teachers who sometimes travel with cash during their vacations. I think it will be a good gift for them. By the way, may I know how you, I mean banks, profit themselves from issuing the cards?
B: Banks profit from the fees they charge the stores that accept credit cards and also from the fees collected from customers who pay for their purchases in monthly installments.
A: In our times, there exists a rule: profit and risk come together. So banks also encounter some risks in operation of the business. Then what are the probable risks? I’m just curious about that.
B: A good question! Everything is two-sided. Banks sometimes have problems collecting overdue payments from bad customers. And banks are also responsible for the goads and services illegally charged to their customers’ accounts, for instance, the use of stolen, lost or counterfeit cards by criminals.
A: OK. Thank you Mr. Lee for the explanations. Now I’ve had valuable knowledge. So we have almost decided to make a deal with your banks. But can you send a team to our university to handle all those procedures? Because as a university we have many teachers, and it will be convenient for both of us to go through the procedures on our campus.
B: Yes. Of course. We have such services for group customers. When shall we do it?
A: Tomorrow morning. We will expect to see you. Is that ok?
B: OK. See you tomorrow.
A: Goodbye!
           A Credit Card
    Today, more and more people in the US are using credit cards instead of money to buy the things they need. Almost anyone who has a steady income and a good work record can apply for a credit card. There are many credit cards available: American Express, VISA and Diner’s Club are the names of some of the most popular.
    If you have a credit card, you can buy a car, eat dinner, take a trip, and even get haircut by charging the cost to your account. In this way you can pay for the purchases a month later, without any extra charge. Or you may choose to make your payments over several months and pay only part of the total amount each month. If you do this, the bank will add a small service charge to your total bill. With the credit card in your wallet or purse, you don’t have to carry much cash. This saves you trips to the hank to cash checks or withdraw cash. Also, if you carry credit cards, you don’t have to worry about losing money. The card user only has to worry about paying the final bill. This, of course, can be a problem, if you can be charged more than you can pay for.
    Every time the card holder uses his card to make purchases, he signs the sales slip in the presence of the seller. A dispensing machine records the sales, the amount, the date of transaction and file card’s reference number. The vendor will then claim reimbursement from the banks with respect to the sales made and pay a service commission, ranging from 1% to 5 % of the sales.
    The card holder will receive from the bank a monthly statement describing the purchase record over the previous month, the amount paid last month and the amount owed up-to-date. The card holder has the option of paying the total amount due within a period prescribed by the bank, or paying a minimum amount. If the card holder opted for the latter, he would have to pay a compound interest of up to 2.4% per month on the amount outstanding.
    Credit cards are big business. Americans spend $ 16 billion a year on cards, and there are already 590 million of them in circulation. Many banks have their own credit card companies and issue cards free to their customers. The stores that accept credit cards must pay a small fee to the banks—a percentage of the purchase price of the merchandise or service. In return, the banks promptly pay the store for the merchandise or service. Some banks offer up to five different types of cards. Most cards have a credit limit revocable on a monthly basis. The credit limit offered by the banks will depend on the income, the profession, and spending habits of the card holder. Some cards have no credit limit although the card holder or the vendor should notify the banks prior to sale if the transaction involves a large sum.
    High tech developments in banking have led to "smart card" being introduced. This card, with a chip embedded in the plastic, works like an instant cheque account which allows purchases to be paid for up to the money value stored in it. Ideally, the "smart card" can be used almost everywhere—unlike credit cards, which some shops refuse to accept, for cheap items in particular.