finance quiz!

• roles of money

  unit of account

  means of exchange

  store of value

  legal tender
• unit of account

  money can be used to place value on goods and services
• means of exchange

  money is used to sell, buy or trade goods and services
• store of value

  can be stored in a bank, and then used in the future to buy goods and services
• legal tender

  money is the legal means you use to pay for goods and services
• ways to pay

  cash

  debit card

  credit card

  cheque

  electronic transfer

  direct debit

  standing order

  prepaid cards

  contactless

  charge cards

  store cards

  mobile banking

  BACS

  CHAPS
• debit card

  payment taken directly from cardholder bank account
• credit card

  goods and services paid for directly by card issuer, needs to be paid back monthly
• cheque

  written order to pay a sum of money from a bank to another person or organisation
• electronic transfer

  payment made directly between bank accounts
• direct debit

  instruction to bank authorising money to be taken out on set dates
• standing order

  instruction to bank authorising varying amounts of money to be taken out in regular intervals
• prepaid cards

  certain amount of money put onto card which you cannot spend more than the amount on there
• charge cards

  cardholder can buy goods and services without paying for them immediately but balance must be paid in full at end of every month
• store cards

  card which is only accepted by the store who issues it
• mobile banking

  bank accounts which can be managed through their mobile phone
• BACS

  bankers automated clearing system - transfer payments from one account to the other, takes three days
• CHAPS

  guaranteed same-day transfer, mostly used for high-value crucial transactions
• current accounts

  standard account

  packaged premium account

  student account

  basic account
• forms of borrowing

  overdraft

  personal loan

  hire purchase

  mortgage

  credit card

  payday loan
• overdraft

  short-term loan which can be used to pay bills if short of cash.

  only pay interest on money borrowed - interest is high and will be charged a fee to use overdraft
• personal loan

  can be used to buy expensive items, borrow fixed amount and pay it back in monthly settlements

  month instalments allow to plan expenditure - arrangement fees, fail to make payments on loan you will lose the asset
• hire purchase

  usually to buy a car, put down a deposit then pay in monthly instalments

  allows to buy expensive item - fall behind on payments, lender may repossess the car
• mortgage

  loan taken out to buy a property, paid in monthly instalments

  allows to buy a house - increase in interest rates may affect ability to pay back mortgage
• credit card

  allows to buy goods and services, spend up amount of credit limit and pay it back at end of each month

  if pay full amount no interest is charges - if pay minimum amount interest is charged on outstanding amount
• payday loans

  short-term loan often used when people need cash to ay bills between paydays

  can help with cash-flow problems - very expensive to borrow
• savings

  ISAs

  deposit and savings accounts

  premium bonds

  bons and gilts

  shares

  pensions
• ISAs

  allows to save without paying tax on interest or profits earned
• deposit and savings accounts

  allows instant access to savings, pays variable amount of interest which is taxable
• premium bonds

  do not pay interest, savers given a chance to win tax-free cash prize every month
• bonds and gilts

  fixed interest securities issued by companies and the government
• shares

  shareholders invent in company for part ownership and in return for their investments they receive payments per share based on performance an profits
• pensions

  long-term savings scheme to help save for retirement
• financial institutions

  bank of England

  banks

  building societies

  credit unions

  national savings and investments

  insurance companies

  pension companies

  pawnbrokers

  payday loan companies
• consumer protection

  financial conduct authority (FCA)

  financial ombudsman service

  financial services compensation scheme (FSCS)

  consumer credit legislation

  office of fair trading (OFT)
• FCA

  authorise businesses to trade, supervise their work and change poor practice through enforcement
• financial ombudsman service

  gives advice or makes decisions based on facts and the service is impartial
• FSCS

  pay compensation to consumers for financial loss if a financial services business is unable to pay claims against it
• consumer credit

  regulates credit card purchases and gives consumers protection when signing loan or other agreements
• office of fair trading

  responsible for protecting consumer interests