Topic 2 Unit 2 Flashcards
Where is the card security number on a debit card?
It is written on the back where the signature is. This is what is required if you to do online shopping, never a PIN.
What is cashback?
Debit cardholders can get cash when they pay for goods in shops that offer ‘cashback’. The amount of cash that they want is added to the total amount of the transaction.
What is the maximum cashback amount?
A maximum of £100 can be withdrawn in cash in this way per transaction, though shops may have a lower limit such as £50.
What card is cashback services available to?
Debit card only.
What is the limit amount on a card?
The maximum you can spend on it. (the money is your current account).
Do some ATMS charge for their services?
There is a charge for using a debit card to withdraw money from an ATM that belongs to a bank that is not your own bank. It may be as little as £1 or £1.50 per transaction.
Is there a charge for shopping online?
There is also occasionally a small charge when you use your debit card to pay for things online – for example, airline tickets. This might be £3 or £4, or a small percentage of the value of the transaction
What are contactless cards also known as?
‘Wave and pay’, or ‘tap and go’, ‘cashless’ and ‘contactless’ cards.
What is an advantage and disadvantage to debits cards?
One advantage of a debit card is that it allows you to access the money in your account at any time of day or night.
One disadvantage is that you are limited to spending the amount that you have in your account.
What are credit cards?
Credit cards are a type of rolling credit. They allow you to borrow money to buy things and pay it back over a period of your choice.
What is an ‘issuer’?
The bank that issues the card.
What is the ‘merchant’?
The shop or supplier who accepts the card as payment.
What is a ‘merchant acquirer’?
The bank that the merchant uses to process the card payment for them.
What is a credit limit?
A maximum amount that you can borrow on the card.
What sort of credit fees/charges are there?
- late payment fees (if your monthly payment is late);
- an ‘over the credit limit’ fee (if you spend over your pre-agreed credit limit);
- a returned payment fee (if you set up a direct debit to make the minimum
monthly payment to your credit card and, on the day that the payment was due
to be taken, there was not enough money in your current account to do so).
How can card holders repay their borrowed amounts?
- Repay the balance completely. If they do this, they will not be charged any interest.
- Repay the minimum balance. A cardholder must make a minimum repayment that is equivalent to more than a single month’s interest. Repay a sum larger than the minimum balance
- If the cardholder does this, they will repay the card balance more quickly than
by repaying only the minimum balance and so will end up paying less interest.
What is the common ‘interest free’ period for credit cards?
It various per company, but the average is between 50 and 59 days.
How many contactless cards are there in the UK?
Over 120 million.
What is an advantage and disadvantage to credit cards?
One advantage of a credit card is that you can buy something and pay for it later.
One disadvantage is that you have to pay high interest rates if you do not repay your balance in full straight away.
What are store-cards?
Some stores issue cards that you can use only in that shop. These may offer you discounts on the items that you buy using the card – especially when you first apply. Store cards work like credit cards, but tend to have higher rates of interest.
What are disadvantages and advantages of store-cards?
One advantage of a store card is that you may qualify for discounts in the shop that
issued the card.
One disadvantage is that if you do not repay your whole balance and you choose to leave
some outstanding instead, you will be charged a really high rate of interest on the amount
left outstanding.
What are charge cards?
A charge card is used for making payments in a similar way to a credit card, except that you must repay the balance in full when the statement arrives.
Who are the main providers of charge cards?
The main providers of charge cards are American Express and Diners’ Club.
Do charge cards have limits?
Charge cards have very high limits - some even no limit at all. However, for large payments, you may be phoned to confirm that you will be able to pay this back in full.
How do charge card companies make any money?
Charge card companies make their money by charging the retailer instead of the customer.
What are the advantages and disadvantages to charge cards?
One advantage is that there is practically no credit limit, meaning expensive loans can be easily accessed.
A disadvantage is that you can only borrow the money for about a month and you’ll have to repay your balance in full when your statement arrives.
What are prepaid cards?
Cards in which a balance is already pre-loaded onto the card.
What’s another use of a prepaid card?
A gift card (eg amazon voucher).
What are the benefits of prepaid cards?
Little identification needed (great availability), help yourself budget or control your spending, there is no debt risk and ease of use whilst abroad.
What are cash cards?
Cash cards are plastic cards that account holders can use in branches and ATMs to take cash out of their accounts. Cash cards cannot be used for anything other than getting cash – that is, they cannot be used for buying things in shops.
What are the limits of a cash card?
When using a cash card, you are limited to the amount that you have in your current
account plus the amount of any overdraft
What are the advantages and disadvantages of cash cards?
One advantage of cash cards is that you can use them to get cash out of an ATM at any time of the day or night.
One disadvantage is that you cannot use a cash card in shops.
