Paying with Plastic
Plastic cards may be used as a form of payment but,
like cheques, they are not legal tender – shopkeepers
do not have to accept them by law.
What is money?
Money is a recognised method of paying for goods
and services.
Money comes in different forms.
However, not all forms of money are legal tender – a
form of money that, by law, must be accepted in
payment.
What is money?
Money overcomes the difficulties of bartering –
directly swapping goods and services.
Money is:
Portable: easy to carry
Non-perishable: lasts a long time
Scarce in supply: too much = worthless
Ways to pay
Currency/legal tender: notes and coins
Plastic money: credit cards, charge cards, store
cards, Visa Debit and ATM cards
Bank current accounts: put money in a bank account
and use to make payments by cheque, payment card,
direct debit, standing order, etc
Notes and coins are legal
tender
Legal tender means that, by law, notes and
coins must be accepted in payment for goods
or services.
Cheques and payment cards are
not legal tender and don’t have to
be accepted.
Payment cards
Payment cards let you pay without having notes
and coins on your person.
Payment cards are only provided if you have a favourable
credit score
Credit cards: Access, Visa, MasterCard
Charge cards: American Express
Store cards: Esso, Statoil, M&S
ATM and cash cards
Visa Debit card
Smart card
Credit cards
Buy now, pay later
A type of credit: you are borrowing
the money from the card provider
You have a credit limit – the most you can spend.
You receive a statement each month.
Each month you must pay the outstanding balance in part or in full
(you must pay a monthly minimum).
You pay interest on any outstanding balance.
Interest can quickly build up – this can be an expensive way to pay.
But if you pay the balance in full each month, you won’t pay any
interest – so this can be the cheapest form of credit if you’re
disciplined in using it!
Charge cards
Eg American Express
You borrow the money you spend, like a credit card.
You receive a statement each month.
You must pay the FULL balance.
There is an annual membership fee.
Store cards
Similar to credit cards, but issued by retailers such as
department stores and petrol companies
You have a credit limit – the most you can spend.
The interest rates can be higher than credit cards.
You can’t use your store card in any other store – so it can limit
you in shopping around for the best value.
Visa Debit
Given to current account holders
You can only spend the money you have in your current
account.
Swiped or used with chip and PIN: most cards now have an
embedded chip
The money is taken from your account immediately.
Visa Debit cards can be used to pay for
goods and services in shops and other
retail outlets, online and by phone.
ATM
Means Automated Teller Machine, often called a ‘hole in the wall’!
Available in most towns and many shopping centres
and banks
24-hour service
Provide many basic services eg
Withdraw money
Order chequebooks
Change PIN
View current balance and most
recent transactions
Top up your mobile phone credit