Payment Methods Flashcards
Cash - Advantages
Most widely accepted
Consumers feel confident
Makes budgeting easier
Cash - Disadvantages
Lost or stolen
Purchase up to certain amounts
Cannot be used online
Debit card - advantage
No need to carry cash
Secure
Widely accepted
Protection on purchases
Suitable for online
Debit card - disadvantages
Not accepted for small transactions
Overspending
Credit card - advantages
1 month interest free credit
Cards widely accepted
Loyalty schemes offered
Protection
Suitable for online
Credit card - disadvantages
Interest charged after a month
Encourage overspending
A limit on amount of credit
Cheque - advantages
Widely accepted face to face
Low risk
Cheque - disadvantages
Old fashion
Errors easily made
No longer accepted by some retailers
Takes 3 days
Electronic transfer - advantages
Instant
No costs
Easy to use
Electronic transfer - disadvantages
Risk of loss
Details have to be correct
Direct debit - advantages
Make regular payments
Quick and easy to set up
Direct debit - disadvantages
If too much money is taken its the payees responsibility to claim money back
Difficult to plan and budget
Standing order - advantages
Plan expenditures
Payments made automatically
Easy to set up and cancel
Standing order - disadvantages
Payments taken regardless of balance
Payments made until cancelled
Pre paid card - advantages
Set Budget to avoid overspending
Limit amount if lost or stolen
Efficient
Widely accepted
Prepaid cards - disadvantages
Cash lost on card if lost
Some cards have set up fees
Charge cards - advantages
Offers additional perks
Items purchases without paying immediately
No need to carry cash
Charge cards - disadvantages
Annual fee
Certain level of income required
Store cards - advantages
Offer loyalty schemes and discounts
Interest free credit period
Store cards - disadvantages
Accepted by store that issues
Risk of overspending
Interest paid
Mobile banking - advantages
Used anytime
Fast
Secure
Mobile banking - disadvantages
Limited features
