ways to pay and current accounts Flashcards
advantages of using cash?
most widely accepted
makes budgeting easier
what are the disadvanteges of using cash?
can be lost or stolen
threat of counterfeit
cannot be used online
features of cash?
notes and coins in a wide range of denominations
features of a debit card?
issued by banks with payments for goods and services.
advantages of a debit card?
no need to carry cash
secure method of paying
low risk of theft
disadvantages of using a debit card?
may result in overspending
features of a credit card?
issued by financial institutions allowing customers to delay payments for goods and services.
advantages of a credit card?
most cards are widely accepted
loyalty schemes
disadvantages of a credit card?
interest charged on balances not paid
encourage a customer to overspend
features of a cheque?
a written order to a bank to make a payment for a specific amount of money from one persons account to another account.
advantages of a cheque?
low risk of payment as the cheque can only be cashed by the named payee
widely accepted
disadvantages of a cheque?
expensive for the customer if the bank refuses to clear the cheque
features of an electronic transfer?
payment is transferred directly from one bank account to another
advantages of an electronic transfer?
provides a record of payment
no additional costs
easy to use
disadvantages of using electronic transfer?
risk of loss if the transfer is incorrectly set up
features of a direct debit?
an agreement made with a bank allowing a third party to withdraw money from an account on a set day to pay for goods or services received
advantages of direct debit?
an easy way to make regular payments
disadvantages of a direct debit?
if the payer makes a mistake and takes too much its the payees responsibility
features of a standing order?
an agreement make with the bank to transfer a fixed summon money to a third party account on a set date on a regular basis
advantages of a standing order?
the same amount is paid each time, making it easier for the payee to plan and budget
disadvantages of a standing order?
payments are taken regardless of the customer’s balance which could lead to unplanned use of an overdraft
features of a pre-paid card?
money is uploaded onto a card with transactions then being withdrawn to reduce the balance
advantages of pre-paid card?
can set a budget in advance to avoid overspending
if lost or stolen the the loss is minimal
disadvantages of a pre-paid card?
no protection if lost
sometimes requires an initial fee
features of a contactless card?
cards which allow you to transfer money when the card touches a contactless terminal
advantages of a contactless card?
secure method of making payments
disadvantages of a contactless card?
must be paid in full each month
often an annual fixed fee is applied
features of charge card?
allow customers to delay payments for goods and services for a short period of time. the balance must be paid off in full when the statement is issued
what are the advantages of the charge card?
reduces the risk of running debts
allows a short period of credit
disadvantages of a charge card?
must be paid in full each month
often an annual fixed fee is applied
features of store card?
issued by a retail outlet so that customers can delay payments for goods and services
advantages of a store card?
allows a short period of credit that is interest free
often offer loyalty schemes
disadvantages of a store card?
only accepted in issuing store or linked associations
interest is paid on outstanding balances
features of mobile banking?
the ability to carry out financial transactions using mobile devices s
advantages of mobile banking?
convenient as can be used at any time and place
secure
disadvantages of mobile banking?
features are limited
features of Bankers automated clearing service (BACS) faster payment?
a system that allows the transfer of payments directly from one bank account to another
advantages of BACS and faster payments?
faster payments allow instant transfers
can be accessed in a number of ways
disadvantages of BACS and faster payments?
faster payments are not offered by all banks
features of cleaning house automated payment systems (CHAPS)?
a system that allows the transfer of payments directly from one bank account to another
advantages of CHAPS?
transfers can be made the same day assuming instructions are received prior to a set time
disadvantages of CHAPS?
there is a fixed charge per transaction
what does current account?
an account with a bank or building society designed for frequent use
what does overdraft mean?
the ability to withdraw money that you do not have from a current account
features of the standard account?
this is the normal account offered to customers with a reasonable credit rating. it includes standard features such as the ability to pay and withdraw money
features of a premium account?
this account offers additional features to a standard account. the bank may have additional charges for these accounts so it is important that you check whether you are being offered a good deal or not.
features of basic account?
this account offers only limited features designed for those customers who may otherwise find it difficult to open a bank account due to poor credit rating. a basic account will not offer an overdraft and will not pay interest on positive balances.
features of a student account?
this account is designed specifically to meet the needs of learners. common features include an agreed overdraft limit and incentives to join the bank. banks are keen to attract students because once they join a bank they tend to stay with them for life.
