Payment methods

credit

postives

Credit is the supply of money now in return for the promise of paying it back later

Offer a cheap use of the funds (provided you always pay it back in full)

Avoid the hassle of carrying around large amount of cash and instead you can just carry it all around in one card conveniently

A convenient payment method for online or over the phone purchases

negatives

Can be more expensive than other forms of credit such as a personal loan

You can loose it more easily than a wad of cash

It will damage your credit rating if you dont pay it back on time

Cash

The notes and money issued by the federal government

Consumers normally use cash for inexpensive purchases

Electronic Funds Transfer: Debit cards and Bpay

It is rarely used for expensive items like cars and houses

Direct debit

Debit cards

You pay no interest, only an account operating fee

With a debit cards, you are electronically accessing money already in your account

You can only use as much money that is your account unless you put more in

Bpay

Bpay is another form of electronic payment used to pay bills

This system transfers funds from your bank account the the bank account you wish to pay

Many consumers have bills that arrive at regular intervals such as a telephone, electricity or car insurance

By using a direct debit system, you can schedule bill payments from your nominated bank account automatically

Cheques

Lay by

A cheque is a written communication ordering your financial institution (bank), to pay a business or person a specific amount of money

Book up

When writing a cheque no blank spaces should be left to avoid extra numbers being added later on

When you buy goods using lay by, you first pay a deposit to the shop who pulls aside the good for you

You then make payments over a fixed period of time

You are not allowed to take the goods home until you pay the last installment

Book up is credit provided by a retailer so that you can purchase goods from the store, take them straight away then pay at a later date

This form of payment is commonly used between hardware stores and tradespeople (builders, plumbers etc)