CORE AREA 2 RESOURCE MANAGEMENT AND CONSUMER STUDIES
PAYMENT OPTIONS AND CREDIT
What you will learn: • Payment options for goods and services • Forms of credit • Factors to consider when choosing credit • Advantages and disadvantages of using credit • Consumer Credit Act 1995
Payment options for goods and services Method
Advantages Cash
Quick and convenient No extra charges are incurred from transactions
Less chance of overspending, as consumers can only spend the cash in their possession
Cheques
Written bills of exchange drawn on a bank by a current-account holder to pay out a specific sum of money
Convenient and safe Useful for postal payments: if a cheque is lost it can be cancelled
Did you know
Irish people are the second greatest users of cheques in the European Union, behind the French. Around 84 million cheques are used by Irish people annually.
Debit cards
Deduct money directly from a consumer’s current account to pay for a purchase. Debit cards can only be used if sufficient funds to pay for the goods being purchased are in the account
Safer than carrying cash. If a card is stolen, it can be cancelled.
A contactless payment (up to €30) and cash-back option is available
Less chance of overspending, as an individual can only spend the money available in their account
Can be used to pay bills online and for online shopping
282 Complete Home Economics
Disadvantages
Risk of losing cash or of cash being stolen
Not suitable for paying large bills or purchasing expensive items, e.g. a car
Coins can be bulky and heavy to carry
A charge is incurred for each cheque used
It takes approximately three days for a cheque to clear (enter a recipient’s account)
A recipient is a person who receives something.
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May incur a charge each time the card is used
Did you know
In 2013 Irish customers made almost 420 million payment card transactions.
