topic a Flashcards
(27 cards)
planning expenditure
helps avoids financial difficulty
- control
- solvent
- target setting
-maintain - manage
-avoids
good credit rating
budgeting,
control costs
remains solvent
avoids bankrupt
generate income and saving
payement methods
bacs
cash
chaps
charge cards
cheque
contactless cards
credit card
debit card
direct debit
electronic transfer
mobile banking
prepaid cards
standing order
store cards
borrowing
overdraftst
personal loans
hire purchases
mortgage
credit card
payday loans
current accounts
basic account
student account
standard account
packaged account
role of money
unit of account
means of exchange
legal tender
store value
influences:
personal attitudes
life stage
culutre
external factors
overdraft
short term loan borrowing money on a current account
flexible
quick to arrange
free to set up
interest rates may be higher
may affect credit score
potential pentaly charges
mortgages
an agreement between you and lender that gives the lender right to take property with repayemetns and interest
4.75%
flexibility
long term stability
risk of repossion
additional costs and commitments
spreads cost of expensive purchases
varible or fixed interest rates
payday loans
small amounts money lent at high interest rate between bills
no major requirements to obtain
helps cashflow problems
bad credit rating can occur
expensive
charged fees additional
hire purchase
a credit agreement to hire an item in agreed monthly amounts do not own items until fully payed
flexible repayments
easy and immediate access
budgeted payement based
assets deprication
higher overall costs
repossion can occur
cash
money in coins or notes
a legal tender currency
no transaction fee
immediate settlement and trade
inconvenient for large transaction
lack of security
lack of traceability
charge card
payement with no spending limit but requires cardholder to pay off full balance monthly
no interest
easy access to large purchases
need good credit rating
not accept everywhere
contactless cards
wave card over cardreader, transmits data
convient
easy to use as no pin
reduce threats of hacker
not widely acceptedd
easy to make fraud tranasaction
cheque
document that orders a bank to pay specific amount from one account to another
no convienece fee
safe
proof of payement
easy access to large payements
longer processing
easy to get scammemd
debit card
a card used in place of cash -directly from account
no debt
online avability
fraudster
need to have money in account
direct debit
lets bank knows servies can take money from account on set date
convience
automatic
overdraft
additional costs
the supplier cannot change the amount
without notice
convenient/easy to set up/efficient payment
method
transactions completed automatically
payments will be paid on time
avoids late payment fee
Payee can change the payment amount/date
Errors can occur
Cancellation is required by the payer
electronic transfer
digital transfer of money between bank accounts
quick
easy
online, offline payements
risk of fraud
technical issue risk
pre paid card
money being placed onto a card account with store leadership
avoids high transaction fee
controls spending as budgeted
additional fee
possible money loss - inactivity
Can be expensive (1) because different fees associated with
getting and using the card (1)
• Purchases are limited to the amount on the card (1) therefore
spending is limited (1)
• Some cards have maximum amounts which can be loaded onto
the card (1) which limits its use (1)
• Less protection than credit cards (1) because pre-paid cards
are not covered by Consumer Credit Act (1)
• Inconvenient/time consuming (1) because money has to be
added to the card (1)
• Some prepaid cards have an expiry date (1) which means any
money left on the card after expiry could be lost/unused (1)
• Some prepaid cards only work for one specific store (1) which
standing order
an instrutment to banks to make regular fixed payements
time saving
flexibility and punctual payements
delay or failure
change can occur without notice
credit card
card that pays for good and services which gets placed on credit card and not paided straight away even though trade has occured
protection against fraud
increased purchasing power
high interest rate
overspending risks- debt
25% apr
personal loans
borrowing a fixed amount and repaying it back in monthly instalements within a specific time period
easy to plan expenditure
low interest rates
flexibility
fees and penalties are high
short term
no credit usage
saving
individual saving account
deposit,saving account
premium bonds
bonds and gilts
shares
pensions
isa
scheme allowing individuals to store financial transactions in an saving account
tax free
easy to access
higher rate of interest
risk of loosing money value
deposit and saving account
type of deposit account held by a financial institution placing a sum of money onto a account
you earn interest
safest investment options
interest rates are flexible
withdrawal limits
inflation
bonds and gilts
gilts issued by governments “low risk investment”
bonds issued by individuals to companies
fixed income
tax benefits
interest rates
capital preservation
ed interest / earn interest (1)
• Regular / guaranteed income (1)
• Low risk (safe/ secure / protected) (1
• Know when you will get your investment back (1)
• Can be sold at any time / savings can be accessed
