Money
Name two of the four functions of money
Unit of account
Means of exchange
Store of value
Legal tender
Name 5 methods of payment
Credit card
Electronic transfer
Store card
Mobile banking
Define what an ISA is
A savings account where interest is not taxed
What does the FCA do?
Regulates the actions of financial services to ensure consumers are protected and standards maintained
What does a credit union offer?
Offers same services as banks/ building societies but every member has a vote to say how it is ran- usually has a community interest
What factors can influence a persons attitude towards money?
Life stages
Culture
External factors- interest rates etc
Give a benefit of using a charge card
Reduces risks of running up debt (as it allows people to delay payments of goods)
What are premium bonds?
A government scheme that allows individuals to save and their bond amount to go into a draw for cash prizes
What does the financial ombudsmen service (FOS) do?
Represents consumers in any dispute with financial service providers
What is the difference between a bank and a building society?
A building society has members that have a vote in how its ran.
A building society is not does not has shareholders and is not listed on the stock exchange
Define the term solvent
The ability to meet day to day expenditure
Give a pro and con of using a cheque
pro- low risk as can only be cashed by the named payee
con- time delay in cheque being processed
Give a pro and con in investing in shares
Share prices fluctuate so can be a risky investment
Share prices fluctuate so can offer a high reward
What is consumer credit legislation involve?
Laws that enforce the regulation of any firm offering credit (ie ensures business cannot go back on its credit agreement)
Name all the ways a bank can communicate with its customers
Branch
Online
Mobile banking
Postal banking
Telephone banking
What is a standing order?
An agreement with the bank to transfer a fixed sum of money on a set date
What is CHAPS?
A system that allows transfer of payments from one bank account to another- usually larger sums of money than BACS
What is a hire purchase?
A way to borrow money. You purchase something and pay it off over time
What does OFT stand for?
Office of fair trading
Encourages fair practice and competition between markets
Name the 4 types of current account a customer may have
Standard
Packaged premium
Basic
Student
Why is it important to manage personal expenditure?
To avoid debt
To ensure you have a good credit rating
To ensure you do not become bankrupt
To set financial targets so you can achieve your goals- i.e. deposit for house
To manage the impact of inflation
Why use a contactless card over using cash?
Quicker method than counting out cash
Means you do not need to carry cash
Secure
Give a pro and con of buying health insurance
pro- compensation provided when ill
pro= reduce burden or stress of illness
con= may pay for something you do not use
con=will not cover pre-known conditions
Name two sources of financial information and guidance and explain how they could help a person to make decisions surrounding their finances
Citizens advice- ran by charities, free to use and offers advise on debt, benefits and banking for example
Individual financial adviser- Provide tailored advice on savings, mortgages etc for a cost
Price comparison sites- best price for different goods
What are the advantages and disadvantages of having a basic current account?
Pro= available to people with low credit rating
Con= limited facilities- no debit card or overdraft