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Ways to pay
Different ways to pay
| Question | Answer |
|---|---|
| Direct Debit | A mandate that gives a company permission to take funds from your account in an agreed way e.g mobile phone bill |
| Standing Order | Permission given to the bank to make regular payments of a set amount to a third party upon request |
| Two features of a store card | Allows a customer to buy on credit on a particular store. A minimum payment is required each month upon receipt of a statement. |
| Mobile Banking | Making transactions using a mobile phone or other portable devices such as a tablet. |
| Pre Paid Card | A cash balance is held on a card which then reduces each time a transaction takes place e.g. school lunch card |
| Difference between Standing Order and Direct Debit | A Standing order involves a set amount but a Direct Debit does not |
| Disadvantage of pre paid cards | Can only be used for a specific purpose |
| Feature of a Direct Debit | Can only be set up by the organisation to which you're making the payment. |
| What are the drawbacks of a Charge Card? | The late payment fees are likely to be much more than the interest on credit card debt. |
| Charge Card | These cards are like credit cards in that you buy something now and pay for it later – but the big difference is that you have to pay it off in full every month. |
| Store Card | Basically a credit card you can only use with one high street chain or group. |
| Benefits of a Store Card | You might be offered vouchers or discounts – such as 10% off purchases for three months or cardholder-only reductions, or free delivery when you buy online. |
| Banker’s Automated Clearing Services (BACS) | Direct transfer of money from one bank account to another, may take a few days |
| Faster Payment Service (FPS) | Direct transfer of money from one bank account to another, guaranteed within 2 hours but may be quicker |
| Clearing House Automated Payment Systems (CHAPS) | Same day transfer of funds from one bank account to another of any amount |
| Credit Card | Isn't linked to your current account and is a credit facility that enables you to buy things immediately, up to a pre-arranged limit, and pay for them at a later date. |
| Disadvantages of using cash | Risk of loss or theft, physical transactions only, inappropriate for large items of expenditure |
| Benefits of a Credit Card | Allows you to defer and spread payment, widely accepted, used online or in store |
| Explain two risks of getting a Credit Card (4 marks) | Interest is charged on balances not paid (1)People can overspend (1)High interest on cash withdrawals (1)Limit set on credit available (1) |
| Outline two risks of taking out a Store Card (4 marks) | Only accepted in issuing store or certain linked stores (1)You have to pay interest on any outstanding balances (1)Can encourage over spending (1) |
| State two features of a cheque (2 marks) | Low risk form of payment (1)Can only be cashed by the person it is written out to (1)Can be written for exact amount (1) |
| Outline two benefits of mobile banking (4 marks) | Convenient (1)Secure (1)Password protected (1) |
Created by:
durquhart1
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