1 - Methods Of Payment Flashcards
What are 2 advantages of using cash?
Most widely accepted form of exchange
Makes budgeting easier
What are 2 disadvantages of using cash?
Can be lost or stolen
Can’t be used for online purchases
What are 2 advantages of using a debit card?
No need to carry cash
Widely accepted, a secure method of payment
What are 2 disadvantages of using a debit card?
A short time-lapse between a transaction
Isn’t appropriate for small transactions
What are 2 advantages of using a credit card?
Allows an interest-free credit period
Suitable for online transactions
What are 2 disadvantages of using a credit card?
Interest is charged on balances not paid off
Can encourage overspending
What are 2 advantages of using a cheque?
A low-risk form of payment, the cheque can only be cashed by the payee
Widely accepted for face-to-face/postal transactions
What are 2 disadvantages of using a cheque?
Viewed as old-fashioned
Easy to make errors when writing the cheque
What are 2 advantages of using electronic transfer?
Almost instantaneous
Provides a record of payment
What are 2 disadvantages of using electronic transfer?
Risk of loss if the transfer is set up incorrectly
Not appropriate for face-to-face transactions
What are 2 advantages of using direct debit?
Easy way to make regular payments
Payment varies to match the amount required
What are 2 disadvantages of using direct debit?
Payee’s responsibility to claim the money back if the payer makes a mistake
Payer determines the amount each time, making it difficult to budget
What are 2 advantages of using a standing order?
Same amount is paid each time, making it easy to budget for the payee
Easy to set up and cancel as required
What are 2 disadvantages of using a standing order?
Payments are taken regardless of the customer’s balance
Payments will continue unless cancelled
What are 2 advantages of using a pre-paid card?
Can set a budget in advance
If lost or stolen, the loss is limited to what the remaining balance is
