Saving Flashcards
What are store cards
They operates in the same way of credit cards except they are only used in the store
What are licensed money lenders
They should only be used as a last resort when no other lending institution Will offer a loan money lender must have the license to lend money lenders charge a minimum rate of 23% APR the money lender and the buyer sign the money lending agreement detailing terms of loan
What are Credit cards
They are used to chip and pin system the credit card company pays the shop the customer is given a statement of the account by the company because they have 28 days to pay if it is not paid in 28 days the credit card company will charge interest on the balance
What is the leasing
It means renting out a good on a constructional basis
Why do people lease goods
People lease good because they may only need the good for a period of time or they do not wish to purchase the item them self
Name another form of leasing
Another form of leasing is renting
What do you all higher purchase contracts contain
Name and address of the buyer. Name address of seller. Cash price of the gods. Full higher purchase price of goods. A pure being charged. The deposit amount. Number of payments. Cost of each payment.
What is collateral
It is an item of value that the bank uses as security against the loan. This means that the bank can sell the item if I customer can no longer pay back the loan. Ownership of collateral is given to the bank until the loan is paid off
What is a mortage
It is a long term loan used to purchase property. The property is held as collateral by the bank until the full amount of mortage is paid off.
What is hire purchase
It is where the buyer hires an item until it is fully paid. The seller gets paid by the finance company or bank. The buyer pays the purchase price to the finance company who also charge the buyer of interest. The finance company own the item until it is paid in full.
Name the three parties to hire purchase
The buyer. The seller. The finance company or bank
What do you need to think of before you borrow money
Do I really need this item. Do I know the difference between the cash price and the total price. How much the monthly repayments be. Can I afford monthly payments. What happens if I could no longer afford to make the monthly payment
What is a bank overdraft
The bank allows the account holder to withdraw more money they have in their account. It is a short term loan it is paid quickly. The overdraft must be first agreed with the bank. The interest rate on the bank overdraft is usually less than the rates charged on the credit.
What is a term loan
It alone for a fixed period of time which the customer repays agreed instalments. It is suitable for buying expensive goods and this term should not exceed the lifetime of the good
Name the two interests that are available on savings
Simple interest and compound interest
Define simple interest
Interest is paid each year on the amount that is saved each year
Define compound interest
Interest paid each year on the total sum of money in the account this means you earn interest you have already earned
What happens when you buy on credit
If we borrowed to pay for goods we must pay interest on the borrowings the full rate of interest is charged and a loan known as a APR (annual percentage rate). Some leading institutions charger rate of interest on borrowings. This means they are charged on a fixed rate each year on the original sum of money borrowed. This works out as much higher interest rate then if concluding using
What is liquidity
The cuisine means how quickly and as it can be converted into cash
What is convenience
How easy it is to access your money
Name a tax on savings
Dirt (the posit interest retention taxed) Is tax on interest earned from financial institution
Name to investment schemes
Shares and dividends
Define shares
When you purchasers you are on it to make some profit you are entitled to a percentage
That define dividend
It is a percentage of profits that’s a business pays to its shareholders
