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Flashcards in Methods of payment Deck (12):
1

2 Advantages of a Cheque

1. Low risk form of payment because only the person who named as the payee can cash in the cheque.
2. No need to provide change as can be written for an exact amount.

2

2 Disadvantages of a Cheque

1. Expensive for the consumer if the bank refuses to clear the Cheque.
2. Viewed as old fashion

3

2 Advantages of a pre-paid card

1. Avoids overspending
2. Good way of controlling amount spent by children e.g. school dinner card money

4

2 Disadvantages of a pre-paid crad

1. No protection if lost
2. Sometimes requires an initial fee to purchase or set up the card

5

2 Advantages of a charge card

1. Reduces risk of running up debts
2. Allows a short period of credit

6

2 Disadvantages of a charge card

1. Must be paid in full each month
2. Often an annual fix fee is applied

7

2 Advantages of a store card

1. Loyalty scheme
2. Short period of tax free credit

8

2 Disadvantages of a store card

1. Only accepted in issuing store
2. Interest is paid on outstanding balances

9

2 Advantages of Banker's Automated Clearing Service (BACS) faster payment

1. Allows almost instant transfers that are guaranteed within 2 hours
2. No additional costs

10

2 Disadvantages of Banker's Automated Clearing Service (BACS) faster payment

1. Limit is set on the amount that can be transferred in any single transaction
2. Faster payment is not offered by all banks

11

2 Advantages of Clearing House Automated Payment Systems (CHAPS)

1. Transfers can be made the same day
2. No limit on the amount that can be transferred in a single transaction

12

A disadvantage of Clearing House Automated Payment Systems (CHAPS)

There is a fixed charge per transaction regardless of the amount transferred