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Business Finance > Payment Methods > Flashcards

Payment Methods Flashcards

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1
Q

what is a debit card?

A

A card allowing the holder to transfer money electronically from their bank account when making a purchase

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2
Q

debit card advantage

A

faster payments

no interest charges

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3
Q

debit card disadvantage

A

no credit allowed
have to have the money
limit to your balance

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4
Q

what is a credit card?

A

a credit card lets you borrow money from a bank or building society which you can use to purchase goods or services

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5
Q

credit card advantage

A

build a credit score

protection against card fraud

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6
Q

credit card disadvantage

A

easy to overspend
high interest rates
limit on what you spend

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7
Q

what is a cheque?

A

an order to pay the bank to pay a state sum

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8
Q

cheque advantage

A

more convenient than cash

payment can be stopped

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9
Q

cheque disadvantage

A

customers can stop payments

doesn’t guarantee payments

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10
Q

what is direct debit?

A

a financial transaction in which one person withdraws funds from another persons account, to go out in the same time every month week etc

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11
Q

direct debit advantage

A

safe and easy for paying bills

no risks for late payments

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12
Q

direct debit disadvantage

A

overpayments

interest on overdraws

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13
Q

what is a pre-paid card?

A

they are a reloadable card, you can add cash to them and top them up when funds run out (voucher)

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14
Q

pre-paid card advantage

A

safer than carrying cash

no worry about debt

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15
Q

pre-paid card disadvantage

A

fee to get the card

keep using it and topping it up

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16
Q

what is mobile banking?

A

financial transactions on your mobile phone

17
Q

mobile banking advantage

A

can bank anywhere

can see all your money going in and out

18
Q

mobile banking disadvantage

A

security concerns

long time to set up

19
Q

what is a charge card?

A

a card that enables the cardholder to make purchases which are paid for by the card user

20
Q

charge card advantage

A

no limits

gains credit score

21
Q

charge card disadvantage

A

more expensive than credit cards

high interest if not paid off

22
Q

what is CHAPS?

A

real time gross settlement payment system used for sterling (£) transactions in the uk

23
Q

CHAPS advantage

A

secure

some day payments

24
Q

CHAPS disadvantage

A

£30 each use

most bank charge £20

25
Q

What is a store card?

A

a credit (points) card that can be used only in one store or chain of stores

26
Q

store card advantage

A

membership perks

big discounts

27
Q

store card disadvantage

A

have low limits on them

only be used in curtain places

28
Q

what is BACS? (bankers automated clearing services)

A

A uk automated payment methods direct debit and bacs direct credit that banks use

29
Q

BACS advantage

A

helps manage transactions

saves time

30
Q

BACS disadvantage

A

only can do payments on business days

payments takes three days to clear

31
Q

what is cash?

A

is legal tender currency or coins that can be used to exchange good, debts or services

32
Q

cash advantages

A

instant money in hand
can be used anywhere
no transaction fee

33
Q

cash disadvantages

A

can rip
lose it
target for thieves

34
Q

what is a standing order?

A

is an instruction a bank account holder gives to their bank to pay a set amount to regular intervals to another account

35
Q

standing order advantage

A

easy and quick

free for the payee and payer

36
Q

what is a contactless payment?

A

a credit, debit card, key fobs, mobile phones or other devices that can be used to pay for good or services

37
Q

contactless payment advantage

A

easy and quick
don’t have to handle cash
see how much your spending on mobile banking

38
Q

contactless payment disadvantage

A

easy to overspend

limit on £45

Business Finance (11 decks)

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