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business unit 3 > personal business and finance > Flashcards

personal business and finance Flashcards

1
Q

what is a charge card?

A

allows customers to delay payments for a short amount of time.

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2
Q

what are the positives of a charge card?

A

reduce being in debt

allows a short period of credit

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3
Q

What are the negatives of chargecards?

A

must be paid in full each month

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4
Q

what is a store card?

A

the retail outlet allows customers to delay payment

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5
Q

what are the positives of a store card?

A

interest-free

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6
Q

what are the negatives of a store card

A

encourage overspending

customer can get into debt

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7
Q

what is CHAPS?

A

the system allows payment from one bank to another bank

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8
Q

what are the positives of CHAPS?

A

no limit on the amount of money being transferred

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9
Q

what are the negatives of CHAPS?

A

fixed charge per transaction

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10
Q

what is direct debit?

A

the third party getting money from the account

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11
Q

what are the positives of direct debit?

A

easy to make a regular payment

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12
Q

what are the negatives of direct debit?

A

cant go in an overdraft if you don’t have money in your account

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13
Q

what is standing order?

A

agreement with the bank to withdraw a fixed amount of money to a third party

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14
Q

what are the positives of standing order?

A

don’t need to remember to make regular payments

the same amount paid each time

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15
Q

what are the negatives of standing order

A

payment is taken if there is no money on the card causes the overdraft
payment will be made unless it’s cancelled

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16
Q

what are the different types of current accounts?

A

basic,standart,student,packed premium

17
Q

what is the basic account?

A

for people who have a poor credit rating
will not offer overdraft
limited feature

18
Q

what is a student account?

A

for students
agreed overdraft limit
free railcard or cash

19
Q

what is a standard account?

A

the normal account offered to people with reasonable credit rating

20
Q

what is packaged premium?

A

offers additional features eg. credit card protection
cashback on certain transaction
additional charge on this account

21
Q

positives of packaged premium?

A

offers a wide range of facilities
no charges in a credit balance
convenient in receiving regular payment

22
Q

negatives of packaged premium?

A

additional monthly charge

23
Q

positives of basic account?

A

available for customers with low credit rating

24
Q

disadvantages of basic account?

A

limited facilities
no overdraft
no debit card

25
Q

what is the advantage of overdraft?

A

can be paid without penalties

provide short term solution

26
Q

what is the disadvantage of overdraft?

A

not the cheapest form of borrowing

when used interest charges are high

27
Q

what is the advantage of a personal loan?

A

useful when looking to purchase specific items
planning payments make it easier
have to prove that they can pay the money back

28
Q

what is the disadvantage of a personal loan?

A

not useful for a short term loan

29
Q

what is the advantage of higher purchases?

A

spread the debt of an expensive ute over a long period of time
allows customers to buy something that they cannot afford

30
Q

what is the disadvantage of higher purchase?

A

agreements can be manipulative

31
Q

what is the advantage of mortgages?

A

allows an individual to spread the cost of a house over 25 year period

32
Q

what is a disadvantage of a mortgage?

A

if not repaid u can lose homeland and affect card rating

33
Q

what is the advantage of payday loans?

A

help solve shortterm cashflow problem

34
Q

what is the disadvantage of a payday loans?

A

the interest rates are high

business unit 3 (6 decks)

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