BTEC Business Unit 3 Revision Questions and answers, 100% Accurate. Rated A+

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BTEC Business Unit 3 Revision Questions and answers, 100% Accurate. Rated A+ Methods of payment - ✔✔-Cash, Credit/debit card; Standing orders; Direct debits; Cheque Cheque - ✔✔-a written ... order directing a bank to pay money Give 2 advantages and 2 disadvantages of using a cheque as a method of payment - ✔✔-Advantages - low risk form of payment as the cheque can only be cashed by the named payee - Widely accepted for face- to face or postal transactions Disadvantages - viewed as old fashioned - easy to make errors when writing the cheque which can cause problems for both the consumer and the recipient Credit Card - ✔✔-Type of card issued by a bank that allows users to finance a purchase. It is issued by financial institutions allowing customers to delay payments for goods and services Give 2 advantages and 2 disadvantages of using a credit card as a method of payment - ✔✔-Advantages - allows a period of credit that is interest free - usually one months - suitable for online transactions Disadvantages - Interest is charged on balances not paid off within a month - can encourage customer to overspend and get into debt Electronic transfer - ✔✔-Payment is transferred directly from one bank account to another Give 2 advantages and disadvantages of using electronic transfer as a method of payment - ✔✔- Advantages - almost instantaneous - provides a record of payment Disadvantages - Risk or loss if the transfer is set up incorrectly - not appropriate for face to face transactions Cash - ✔✔-Notes and coins in a wide range of denominations Give 2 advantages and disadvantages of using cash as a method of payment - ✔✔-Advantages - most widely accepted form of exchange - makes budgeting easier Disadvantages - can be lost or stolen - cannot be used for online purchases Debit card - ✔✔-A bank card that automatically deducts the amount of a purchase from the checking account of the cardholder Give 2 advantages and disadvantages of using a Debit card as a method of payment - ✔✔-Advantages - no need to carry cash - widely accepted & a secure method of payment Disadvantages - short time lapse between making the transaction and the money being drawn from the customers account - Not accepted or appropriate for small transactions Charge card - ✔✔-A payment type that works just like credit cards except the balance must be paid in full every month. Give 2 advantages and disadvantages of using a Charge card as a method of payment - ✔✔-Advantages - allows a short period of credit - offers a high spending limit or no limit at all so larger purchases can be covered easily Disadvantages - Must be paid in full each month - Failure to replay results in very high late payment fees, usually much higher than a standard credit card Contactless card - ✔✔-A card with an embedded chip that only needs to be held close to a terminal to transfer its data; no PIN number needs to be entered. Give 2 advantages and disadvantages of using a contactless card as a method of payment - ✔✔- Advantages - secure method of making a payment - fast and efficient to make a transaction Disadvantages - only accepted for relatively small transactions - still not widely accepted at outlets pre-paid card - ✔✔-Money is uploaded onto a card with transactions then being withdrawn to reduce the balance Give 3 advantages and disadvantages of using a prepaid card as a method of payment - ✔✔-Advantages - Can set a budget in advance to avoid overspen [Show More]

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