all the content for business Flashcards
(92 cards)
function of money
be unit of account
legal tender
means of exchange
store of value
influences on the role of money
culture
life event
external influences
interest rates
personal attitudes
advantage and disadvantage of using cash?
- The advantage of using cash is cash is widely accepted everywhere
- Another advantage of using cash is that it has no extra fees you have to pay.
Disadvantages
the disadvantage of using cash is that it is very easy to lose money
another disadvantage of using cash is it very inconvenient
why plan expenditure?
control cost
avoid getting into debts
set financial goals
maintain good credit score
generate income and sales
advantage and disadvantages of using credit
Using credit has two main advantages. First, it allows you to make purchases even if you don’t have enough cash at the moment, offering flexibility in spending. Second, using credit responsibly helps build a good credit score, which is useful for future financial needs. However, there are also disadvantages. One is the risk of falling into debt if you spend more than you can afford to repay. Another is the high interest rates that can be charged if you don’t pay off the balance on time.
advantage and disadvantage of using of debit
Advantage: You avoid going into debt because a debit card uses money directly from your bank account. Advantage: It also helps with budgeting, as you can only spend what you actually have.
Disadvantage: Debit cards have less fraud protection, so if your card is stolen, your money could be at risk. Disadvantage: Also, if there’s a mistake or dispute, your funds might be held while it gets sorted out.
advantage and disadvantage of using of contactless
1.one advantage of Using contactless payment is quick and convenient, allowing purchases with just a tap.
2.one advantage of using contactless payments is It saves time, reduces the need for cash, and improves hygiene by avoiding physical contact. Many cards and devices also have security features to protect against fraud.
3.disadvantage of using contactless payment is accidental payments, spending too easily, and limits on transaction amounts.
- another disadvantage of using contactless payments it can get lost or stolen, unauthorized transactions may occur before it is blocked. While contactless payments are useful, they carefully to stay secure.
advantage and disadvantage of using of cheque
Advantage: Cheques provide a clear paper trail, which can be beneficial for record-keeping and tracking payments, especially for business and legal purposes. Advantage: They allow payments to be made without the need for electronic devices or immediate digital verification, which can be helpful in environments with limited access to electronic banking.
Disadvantage: Cheques typically take longer to clear than electronic transactions, which can delay the confirmation of funds. Disadvantage: They are more susceptible to fraud and errors, as they require manual processing and can be misused if lost or stolen.
advantage and disadvantage of using of mobile banking
Mobile banking has both advantages and disadvantages. It is convenient, allowing users to manage their money anytime and anywhere. It saves time by enabling quick transfers, bill payments, and balance checks without visiting a bank. Mobile banking also provides security features like biometric login and alerts for suspicious activity. However, there are some risks, such as fraud, hacking, and technical issues that may prevent access to accounts. Poor internet connection can also be a problem. While mobile banking is fast and efficient, users must be cautious and ensure their accounts are secure
advantage and disadvantage of using of standard current account
- one advantage of using standard account is It allows easy access to money through debit cards, online banking, and ATMs, making everyday transactions simple.
- other advantage of using standard account is features like direct debits, standing orders, and overdraft facilities for extra flexibility.
3.one disadvantage of using a standard account is the fees for overdrafts or certain transactions. If not managed well, overdrafts can lead to debt.
- other disadvantage of using standard account is the limits on free transactions or minimum balance requirements. While a current account is useful for managing money, it is important to use it wisely to avoid extra costs.
advantage and disadvantage of using of standard basic account
1.one advantage of using standard basic account is all feature such as allowing you to make deposit and withdraw cash, make payments, and receive wages easily.
- other advantage of using standard basic account It provides a debit card for secure transactions and online banking for convenience.
- one disadvantage of using standard basic account is the accounts may have limited features, such as no overdraft facility or interest on savings. Some banks may also charge fees for certain services.
advantage and disadvantage of using of standard premium account
one advantage of using premium account is the extra features like higher interest rates, cashback on spending, or travel insurance. Customers may also get better customer service and exclusive deals.
one disadvantage of using Premium accounts usually have higher monthly fees, which may not be worth it if the added benefits are not used.
other disadvantage of using premium account is some of the features may only be useful to certain people, making it not ideal for everyone. So, while it offers extra perks, the cost may not always justify the benefits for every user.
advantage and disadvantage of using of student current account
One key advantage is that these accounts often come with no monthly fees, which helps students manage their finances without additional costs. Many student accounts also offer benefits like an interest-free overdraft, which provides flexibility if students need extra money temporarily. Additionally, student accounts often include perks like discounts and special offers tailored to students.
one key disadvantage of a student account is they might need to convert their accounts to a standard current account, which could involve changes in fees or overdraft terms. Also, while the interest-free overdraft can be useful, it can lead to bad financial habits if not managed carefully. Furthermore, student accounts often have limited features compared to regular current accounts, and students may need to pay attention to any specific terms and conditions to avoid extra charges.
advantage and disadvantage of using of overdraft as form of borrowing
Using an overdraft as a form of borrowing has both advantages and disadvantages. One advantage is that it provides quick access to extra funds in case of emergencies or unexpected expenses. It is also flexible, as you only pay interest on the amount you use.
However, overdrafts can be expensive if not repaid quickly, as they often come with high interest rates and fees. Overusing an overdraft can lead to a cycle of debt, and excessive reliance on it may affect your credit score. Therefore, while overdrafts can be helpful, they should be used carefully and responsibly.
advantage and disadvantage of using of mortgages as form of borrowing
Mortgages are a popular way to finance the purchase of a home, and they offer several advantages. One of the main benefits is that they allow you to buy a property without needing to pay the full price upfront, making homeownership accessible. Additionally, mortgage interest rates are often lower compared to other forms of borrowing, and in many cases, the property value may increase over time, building equity.
However, there are also disadvantages. Mortgages usually require long-term commitment, often spanning 15 to 30 years, meaning you’re locked into regular payments for a significant period. If you fail to make payments, you risk losing your home through foreclosure. Furthermore, the total cost of the mortgage, including interest, can be much higher than the original property price, especially with adjustable-rate mortgages that can fluctuate over time.
advantage and disadvantage of using of hire purchase as form of borrowing
Hire purchase can be a useful way to acquire goods, especially for people who can’t afford to pay the full price upfront. One advantage is that it allows you to spread the cost of an item over a set period, making it more affordable. Also, once you complete all the payments, the item becomes fully yours.
However, a disadvantage is that hire purchase agreements often come with higher overall costs due to interest charges, which can make the item more expensive than paying in full upfront. Additionally, failing to keep up with payments can lead to the loss of the item and affect your credit score.
advantage and disadvantage of using of personal loans as form of borrowing
Personal loans can be a convenient way to borrow money as they often come with fixed interest rates and predictable repayment schedules. One advantage is that they can be used for various purposes, like consolidating debt or covering unexpected expenses.
However, the downside is that personal loans can have high-interest rates, especially if you have a poor credit history. If not managed properly, they can lead to financial strain due to the fixed monthly payments. Additionally, some lenders may charge fees for loan origination or early repayment.
advantage and disadvantage of using of pay day loans as form of borrowing
Payday loans can provide quick access to cash in emergencies, making them an appealing option for some. One advantage is that they are typically easy to qualify for, with little documentation required, and you can often get the money on the same day. This can be useful when you need funds urgently, like for unexpected expenses.
However, payday loans come with significant disadvantages. They usually carry extremely high-interest rates, which can make repayment difficult and lead to a cycle of debt if not paid off quickly. Many people struggle to repay payday loans on time, resulting in additional fees and interest charges. This can cause financial stress and harm your credit score if the loan isn’t repaid as agreed.
advantage and disadvantage of using of credit cards as form of borrowing
Credit cards offer flexibility and convenience, making them a popular form of borrowing. One advantage is that they allow you to make purchases and pay them off later, often with an interest-free period if paid in full each month. They can also help build your credit score if managed responsibly, and offer rewards or cashback for spending.
On the downside, credit cards often come with high-interest rates if the balance isn’t paid off quickly, leading to debt accumulation. Additionally, overspending can be tempting since credit cards provide easy access to funds, which can result in financial strain if not carefully managed. Late payments can also lead to penalties and negatively impact your credit score.
advantage and disadvantage of using ISA as savings
Using an ISA for savings has the advantage of allowing your savings to grow tax-free, meaning you won’t pay tax on the interest or returns. It’s a great way to boost your savings without worrying about tax deductions.
However, a disadvantage is that there are annual contribution limits, so you can only save a certain amount each year. Also, some ISAs may require you to lock your money in for a set period, which can limit access if you need the funds urgently.
advantage and disadvantage of using deposit and savings account as savings
A deposit and savings account offers a safe place to store your money, with the advantage of earning interest over time. These accounts are low-risk, and your savings are often protected by government insurance schemes up to a certain amount.
However, the downside is that interest rates can be quite low, meaning your savings might not grow much, especially when inflation outpaces the interest earned. Additionally, you may have limited access to your money if there are withdrawal restrictions or penalties.
advantage and disadvantage of using premium bond as investment
Premium bonds offer a unique advantage as an investment because, instead of earning interest, you have the chance to win tax-free prizes in a lottery-style draw. This can make it exciting and potentially rewarding, while also keeping your money safe, as the bonds are backed by the government.
However, the disadvantage is that there is no guaranteed return, and your chances of winning large prizes are relatively low. Additionally, the interest rate is often lower than other savings or investment options, so your money may not grow as much as it would elsewhere. Moreover, it can take time to see any returns, making it less ideal for short-term goals.
advantage and disadvantage of using bonds and gilts as investment
Bonds and gilts are relatively safe investment options, with the advantage of providing a steady stream of income through regular interest payments. They are considered low-risk, especially gilts, which are government-backed, making them a reliable choice for conservative investors. Bonds can also be easily traded, offering some level of liquidity.
On the downside, the returns from bonds and gilts are usually lower compared to riskier investments like stocks. If interest rates rise, the value of existing bonds may fall, leading to potential losses if sold before maturity. Additionally, bonds have fixed interest rates, so they might not keep up with inflation, reducing their purchasing power over time.
advantage and disadvantage of using shares as investment
Investing in shares offers the advantage of potentially high returns, as the value of shares can increase over time, and investors can also earn dividends. This makes shares a good option for long-term growth, especially in companies that perform well. Moreover, shares are relatively liquid, meaning they can be bought and sold easily.
However, the downside is that shares come with higher risk. The value of shares can fluctuate significantly due to market conditions, and there is no guarantee of returns. If the company performs poorly, you may lose money, and dividends may not always be paid. Additionally, investing in shares requires a good understanding of the market and can be volatile in the short term.
