Payment Methods

Question 1

what is a debit card?

Answer 1

A card allowing the holder to transfer money electronically from their bank account when making a purchase

Question 2

debit card advantage

Answer 2

faster payments

no interest charges

Question 3

debit card disadvantage

Answer 3

no credit allowed
have to have the money
limit to your balance

Question 4

what is a credit card?

Answer 4

a credit card lets you borrow money from a bank or building society which you can use to purchase goods or services

Question 5

credit card advantage

Answer 5

build a credit score

protection against card fraud

Question 6

credit card disadvantage

Answer 6

easy to overspend
high interest rates
limit on what you spend

Question 7

what is a cheque?

Answer 7

an order to pay the bank to pay a state sum

Question 8

cheque advantage

Answer 8

more convenient than cash

payment can be stopped

Question 9

cheque disadvantage

Answer 9

customers can stop payments

doesn’t guarantee payments

Question 10

what is direct debit?

Answer 10

a financial transaction in which one person withdraws funds from another persons account, to go out in the same time every month week etc

Question 11

direct debit advantage

Answer 11

safe and easy for paying bills

no risks for late payments

Question 12

direct debit disadvantage

Answer 12

overpayments

interest on overdraws

Question 13

what is a pre-paid card?

Answer 13

they are a reloadable card, you can add cash to them and top them up when funds run out (voucher)

Question 14

pre-paid card advantage

Answer 14

safer than carrying cash

no worry about debt

Question 15

pre-paid card disadvantage

Answer 15

fee to get the card

keep using it and topping it up

Question 16

what is mobile banking?

Answer 16

financial transactions on your mobile phone

Question 17

mobile banking advantage

Answer 17

can bank anywhere

can see all your money going in and out

Question 18

mobile banking disadvantage

Answer 18

security concerns

long time to set up

Question 19

what is a charge card?

Answer 19

a card that enables the cardholder to make purchases which are paid for by the card user

Question 20

charge card advantage

Answer 20

no limits

gains credit score

Question 21

charge card disadvantage

Answer 21

more expensive than credit cards

high interest if not paid off

Question 22

what is CHAPS?

Answer 22

real time gross settlement payment system used for sterling (£) transactions in the uk

Question 23

CHAPS advantage

Answer 23

secure

some day payments

Question 24

CHAPS disadvantage

Answer 24

£30 each use

most bank charge £20

Question 25

What is a store card?

Answer 25

a credit (points) card that can be used only in one store or chain of stores

Question 26

store card advantage

Answer 26

membership perks | big discounts

Question 27

store card disadvantage

Answer 27

have low limits on them | only be used in curtain places

Question 28

what is BACS? (bankers automated clearing services)

Answer 28

A uk automated payment methods direct debit and bacs direct credit that banks use

Question 29

BACS advantage

Answer 29

helps manage transactions | saves time

Question 30

BACS disadvantage

Answer 30

only can do payments on business days | payments takes three days to clear

Question 31

what is cash?

Answer 31

is legal tender currency or coins that can be used to exchange good, debts or services

Question 32

cash advantages

Answer 32

instant money in hand can be used anywhere no transaction fee

Question 33

cash disadvantages

Answer 33

can rip lose it target for thieves

Question 34

what is a standing order?

Answer 34

is an instruction a bank account holder gives to their bank to pay a set amount to regular intervals to another account

Question 35

standing order advantage

Answer 35

easy and quick | free for the payee and payer

Question 36

what is a contactless payment?

Answer 36

a credit, debit card, key fobs, mobile phones or other devices that can be used to pay for good or services

Question 37

contactless payment advantage

Answer 37

easy and quick don't have to handle cash see how much your spending on mobile banking

Question 38

contactless payment disadvantage

Answer 38

easy to overspend | limit on £45