personal business and finance Flashcards
what is a charge card?
allows customers to delay payments for a short amount of time.
what are the positives of a charge card?
reduce being in debt
allows a short period of credit
What are the negatives of chargecards?
must be paid in full each month
what is a store card?
the retail outlet allows customers to delay payment
what are the positives of a store card?
interest-free
what are the negatives of a store card
encourage overspending
customer can get into debt
what is CHAPS?
the system allows payment from one bank to another bank
what are the positives of CHAPS?
no limit on the amount of money being transferred
what are the negatives of CHAPS?
fixed charge per transaction
what is direct debit?
the third party getting money from the account
what are the positives of direct debit?
easy to make a regular payment
what are the negatives of direct debit?
cant go in an overdraft if you don’t have money in your account
what is standing order?
agreement with the bank to withdraw a fixed amount of money to a third party
what are the positives of standing order?
don’t need to remember to make regular payments
the same amount paid each time
what are the negatives of standing order
payment is taken if there is no money on the card causes the overdraft
payment will be made unless it’s cancelled
what are the different types of current accounts?
basic,standart,student,packed premium
what is the basic account?
for people who have a poor credit rating
will not offer overdraft
limited feature
what is a student account?
for students
agreed overdraft limit
free railcard or cash
what is a standard account?
the normal account offered to people with reasonable credit rating
what is packaged premium?
offers additional features eg. credit card protection
cashback on certain transaction
additional charge on this account
positives of packaged premium?
offers a wide range of facilities
no charges in a credit balance
convenient in receiving regular payment
negatives of packaged premium?
additional monthly charge
positives of basic account?
available for customers with low credit rating
disadvantages of basic account?
limited facilities
no overdraft
no debit card
what is the advantage of overdraft?
can be paid without penalties
provide short term solution
what is the disadvantage of overdraft?
not the cheapest form of borrowing
when used interest charges are high
what is the advantage of a personal loan?
useful when looking to purchase specific items
planning payments make it easier
have to prove that they can pay the money back
what is the disadvantage of a personal loan?
not useful for a short term loan
what is the advantage of higher purchases?
spread the debt of an expensive ute over a long period of time
allows customers to buy something that they cannot afford
what is the disadvantage of higher purchase?
agreements can be manipulative
what is the advantage of mortgages?
allows an individual to spread the cost of a house over 25 year period
what is a disadvantage of a mortgage?
if not repaid u can lose homeland and affect card rating
what is the advantage of payday loans?
help solve shortterm cashflow problem
what is the disadvantage of a payday loans?
the interest rates are high
