ways to pay and current accounts

Question 1

advantages of using cash?

Answer 1

most widely accepted

makes budgeting easier

Question 2

what are the disadvanteges of using cash?

Answer 2

can be lost or stolen
threat of counterfeit
cannot be used online

Question 3

features of cash?

Answer 3

notes and coins in a wide range of denominations

Question 4

features of a debit card?

Answer 4

issued by banks with payments for goods and services.

Question 5

advantages of a debit card?

Answer 5

no need to carry cash
secure method of paying
low risk of theft

Question 6

disadvantages of using a debit card?

Answer 6

may result in overspending

Question 7

features of a credit card?

Answer 7

issued by financial institutions allowing customers to delay payments for goods and services.

Question 8

advantages of a credit card?

Answer 8

most cards are widely accepted

loyalty schemes

Question 9

disadvantages of a credit card?

Answer 9

interest charged on balances not paid

encourage a customer to overspend

Question 10

features of a cheque?

Answer 10

a written order to a bank to make a payment for a specific amount of money from one persons account to another account.

Question 11

advantages of a cheque?

Answer 11

low risk of payment as the cheque can only be cashed by the named payee
widely accepted

Question 12

disadvantages of a cheque?

Answer 12

expensive for the customer if the bank refuses to clear the cheque

Question 13

features of an electronic transfer?

Answer 13

payment is transferred directly from one bank account to another

Question 14

advantages of an electronic transfer?

Answer 14

provides a record of payment
no additional costs
easy to use

Question 15

disadvantages of using electronic transfer?

Answer 15

risk of loss if the transfer is incorrectly set up

Question 16

features of a direct debit?

Answer 16

an agreement made with a bank allowing a third party to withdraw money from an account on a set day to pay for goods or services received

Question 17

advantages of direct debit?

Answer 17

an easy way to make regular payments

Question 18

disadvantages of a direct debit?

Answer 18

if the payer makes a mistake and takes too much its the payees responsibility

Question 19

features of a standing order?

Answer 19

an agreement make with the bank to transfer a fixed summon money to a third party account on a set date on a regular basis

Question 20

advantages of a standing order?

Answer 20

the same amount is paid each time, making it easier for the payee to plan and budget

Question 21

disadvantages of a standing order?

Answer 21

payments are taken regardless of the customer’s balance which could lead to unplanned use of an overdraft

Question 22

features of a pre-paid card?

Answer 22

money is uploaded onto a card with transactions then being withdrawn to reduce the balance

Question 23

advantages of pre-paid card?

Answer 23

can set a budget in advance to avoid overspending

if lost or stolen the the loss is minimal

Question 24

disadvantages of a pre-paid card?

Answer 24

no protection if lost

sometimes requires an initial fee

Question 25

features of a contactless card?

Answer 25

cards which allow you to transfer money when the card touches a contactless terminal

Question 26

advantages of a contactless card?

Answer 26

secure method of making payments

Question 27

disadvantages of a contactless card?

Answer 27

must be paid in full each month | often an annual fixed fee is applied

Question 28

features of charge card?

Answer 28

allow customers to delay payments for goods and services for a short period of time. the balance must be paid off in full when the statement is issued

Question 29

what are the advantages of the charge card?

Answer 29

reduces the risk of running debts | allows a short period of credit

Question 30

disadvantages of a charge card?

Answer 30

must be paid in full each month | often an annual fixed fee is applied

Question 31

features of store card?

Answer 31

issued by a retail outlet so that customers can delay payments for goods and services

Question 32

advantages of a store card?

Answer 32

allows a short period of credit that is interest free | often offer loyalty schemes

Question 33

disadvantages of a store card?

Answer 33

only accepted in issuing store or linked associations | interest is paid on outstanding balances

Question 34

features of mobile banking?

Answer 34

the ability to carry out financial transactions using mobile devices s

Question 35

advantages of mobile banking?

Answer 35

convenient as can be used at any time and place | secure

Question 36

disadvantages of mobile banking?

Answer 36

features are limited

Question 37

features of Bankers automated clearing service (BACS) faster payment?

Answer 37

a system that allows the transfer of payments directly from one bank account to another

Question 38

advantages of BACS and faster payments?

Answer 38

faster payments allow instant transfers | can be accessed in a number of ways

Question 39

disadvantages of BACS and faster payments?

Answer 39

faster payments are not offered by all banks

Question 40

features of cleaning house automated payment systems (CHAPS)?

Answer 40

a system that allows the transfer of payments directly from one bank account to another

Question 41

advantages of CHAPS?

Answer 41

transfers can be made the same day assuming instructions are received prior to a set time

Question 42

disadvantages of CHAPS?

Answer 42

there is a fixed charge per transaction

Question 43

what does current account?

Answer 43

an account with a bank or building society designed for frequent use

Question 44

what does overdraft mean?

Answer 44

the ability to withdraw money that you do not have from a current account

Question 45

features of the standard account?

Answer 45

this is the normal account offered to customers with a reasonable credit rating. it includes standard features such as the ability to pay and withdraw money

Question 46

features of a premium account?

Answer 46

this account offers additional features to a standard account. the bank may have additional charges for these accounts so it is important that you check whether you are being offered a good deal or not.

Question 47

features of basic account?

Answer 47

this account offers only limited features designed for those customers who may otherwise find it difficult to open a bank account due to poor credit rating. a basic account will not offer an overdraft and will not pay interest on positive balances.

Question 48

features of a student account?

Answer 48

this account is designed specifically to meet the needs of learners. common features include an agreed overdraft limit and incentives to join the bank. banks are keen to attract students because once they join a bank they tend to stay with them for life.