What are the Four functions of Money?
Store of Value, Unit of Account, Means of Exchange, Legal Tender
Define Store of Value
Allows Future purchases
Define Unit of Account
Gives value to items (e.g. chocolate bar is £2)
Define Means of Exchange
Allows trade
Define Legal Tender
Can be used anywhere as it is legally recognised
What is Interest Rate?
It is the percentage change by lenders (banks) when someone borrows money, or the percentage earned on savings.
What is Inflation rate?
Measurement of how quickly the general level of prices for goods and services in an economy increase over time.
What are the factors that affect the attitude toward money?
Life stage, Culture, Life events
What is a Debit Card?
Is a card where payments for goods and services are taking directly from a current account.
What is a advantage and disadvantage of a Debit Card?
Debit cards are a secure method with low level risk, which is suitable for online transactions.
Not accepted or appropriate for small transactions
What is a advantage and disadvantage of Cash?
Widely accepted, Consumers are confident in using this as it makes budgeting easier.
Cash is easily lost or stolen and counterfeit is possible.
What is a Credit Card?
Financial institutions allow customer to delay payments for goods and services.
What is a advantage and disadvantage of a Credit Card?
Allows a period of credit that is interest free (one month loyalty schemes).
It is very easy to overspend, which can lead to huge debt.
What is a cheque?
A written slip to make a payment for a specific amount of money.
What is a advantage and disadvantage of a cheque?
Low risk as it can only be cashed by the name n the cheque.
Very uncommon, and is relatively easy to commit fraud.
What is a Electronic Transfer?
Payment from one account to another.
What is a advantage and disadvantage of a Electronic Transfer?
Very easy to do, mobile banking.
If details are incorrect, can lose the money that is sent.
What is Direct Debit?
Money is automatically withdrawn from bank on a set day to pay for goods or services received (e.g. paying a gas bill).
What is a advantage and disadvantage of Direct Debit?
Easy to make regular payments.
Payee doesn’t choose amount so makes budgeting tough.
What is a standing order?
Transfer a fixed of money on a monthly basis (e.g. 10 month for AA car breakdown).
What is a advantage and disadvantage of a standing order?
Easy to budget as the same amount is withdrawn each month.
Could go into overdraft if not enough in account.
What is a Pre-paid card
Upload money onto the card.
What is a advantage and disadvantage of a Pre-Paid Card?
If lost only lost the amount deposited in the card.
If lost, cant claim back the lost money.
What is Contactless?
Tapping a debit or credit card to make transactions in store.
