lesson 4 - payment options

Question 1

what is a debit card (eftpos)?

Answer 1

uses your own money from your bank account
NO interest but it’s limited to your bank account balance

Debit cards are linked directly to a checking account and allow users to spend only what they have.

Question 2

cash payments

Answer 2

consumers normally use cash to pay for relatively inexpensive items such as food, drinks, or bus fare

Cash is less commonly used for large purchases like a house or car.

Question 3

what is a direct debit?

Answer 3

scheduled automatic payments for bills
ensures regular payments without manual intervention

Direct debits help manage recurring expenses efficiently.

Question 4

what is credit?

Answer 4

allows spending of money you don’t have; however, interest is charged
it can lead to debt if not managed carefully

Credit can be useful for large purchases but requires responsible management.

Question 5

pros of credit use

Answer 5

• convenient for online purchases
• builds credit history
• interest free if paid off fully each month

Question 6

cons of credit use

Answer 6

• easy to overspend
• late payments hurt credit score
• often more expensive than loans

Question 7

what is afterpay?

Answer 7

buy now, pay later (no upfront credit application)
no interest if paid on time

Afterpay allows consumers to make purchases and pay for them in installments without incurring interest as long as payments are made on time.

Question 8

what is paypal?

Answer 8

secure online payments using linked bank/credit account.

PayPal provides a platform for users to make online transactions securely without directly sharing their financial details.

Question 9

what is lay-by?

Answer 9

pay in instalments before receiving the item, no interest unless delayed

Lay-by is a purchasing method where consumers pay for an item in installments before taking possession of it.

Question 10

what does EFTPOS stand for?

Answer 10

electronic funds transfer at point of sale.

EFTPOS is a payment system that allows customers to make electronic payments directly from their bank accounts at the point of sale.

Question 11

what is legal tender?

Answer 11

official money accepted for payment.

Legal tender refers to currency that must be accepted if offered in payment of a debt.